Future course of employment in the hands of the gods of growth

There is one economic sector in which Greece shows signs of real convergence with the rest of Europe; employment, which is forecast to rise in 2002, but the extent of this rise will depend on the growth of GDP and the effectiveness of the overhaul of the Human Resources Employment Organization (OAED). According to a recent European Union report, the percentage of employment in the 15-member union is expected to remain below 64.5 percent (73.1 percent for men and 55.65 percent for women), while the grand target of achieving 70 percent employment by 2010 (adding 20 million jobs) remains in place. The pessimistic projection for 2002 and recent data on unemployment have led the European Commission to urge member states to implement action programs and to set down specific priorities, directly linking cutbacks in early-retirement incentives with boosting employment among those aged between 55 and 65. The report also emphasizes the need for implementing tax incentives to help create jobs, for taking initiatives aimed at lifting the obstacles to access in labor markets, and for re-examining social security benefits that act as disincentives in the search for jobs. An interesting feature of this report, which was released in the autumn, is the lack of the usual recommendations for «active» policies and the emphasis on taxation and pension reform measures. The commission is now preparing a report for the next EU summit. Forecasts for 2002 are relatively more favorable for Greece, Spain, Portugal and Ireland. Employment in Greece is expected to grow by 0.2 percent, in Spain by 1 percent, in Portugal by 0.7 percent and in Ireland by 0.85 percent. But these figures could be revised at any time. By contrast, employment is forecast to decline in Denmark and remain stable in Germany, Austria and the UK. A decline in the percentage of young people in employment is expected in these countries and Ireland. Greece and Spain may expect a rise in the percentage of young people employed. However, the picture as regards unemployment is much worse. Although Greece continues to be deficient in its supply of statistical data to the EU, the latest available data indicate that the unemployment rate stands at 11.1 percent, against a union average of 8.3 percent. Among the young, the divergence is even wider. According to 2000 second-quarterly data, unemployment among those aged between 15 and 24 in Greece stood at 37.7 percent, while the average in the 15 member states was 17.8 percent. The situation is equally disappointing as regards the long-term unemployed, where the difference is striking; 10.2 percent in Greece, as against 4.5 percent in the EU. Low employment level Despite high growth rates, Greece finds it difficult to boost its overall employment level. Fewer people in work means smaller output and higher expenditure on unemployment benefits. Ireland, Spain, the Netherlands and France have the best record in the EU, each for different reasons. Low-income taxation Greece’s obligatory deductions for tax and social security contributions from low-paid workers are near the EU average. But as taxation of such incomes is low, social security contributions are high relative to other countries, reflecting the cost of pension funds and deductions for health cover. High-tech exports High-tech products as a percentage of total exports is a strong indicator of the development of an economy, its modernization and competitiveness. In 2001, Greece at 4.6 percent lagged behind the EU in this field, and was down from 6.7 percent in 2000. Peanuts for research Greece spends the least on the development of technology. This is not just due to the lack of appropriate industries, but also, in large measure, to mistaken choices in the field of education and ineffective policies in attracting foreign investment in the information and advanced technology sectors. Telecoms cheaper The rates charged for telecommunications services in Greece are below the EU averages for both city and long-distance calls, but not for international calls. This, of course, is only a spurious comparison, as the quality of services may differ and may even be higher in countries with lower rates.