ECONOMY

Jobless rate jumps to 10-yr high

Unemployment in Greece hit a 10-year high in the second quarter, according to data released by the Hellenic Statistical Authority (ELSTAT) yesterday that noted an increase to 11.8 percent compared to 8.9 percent a year earlier. That’s the highest rate since 2000, when unemployment was 12.3 percent. In the first quarter of this year, Greece’s jobless rate stood at 11.7 percent. Greece is mired in a growing recession and rising borrowing costs as the government labors to slash a deficit over four times the allowed EU level and reduce a debt of nearly 300 billion euros. The economy is expected to contract by 4 percent of output this year. The country’s 15-29 age bracket remains the worst affected, with 22.8 percent in that group out of work, compared to 17.7 percent last year. There were 594,032 people looking for employment in the second quarter. Unemployment among women rose from 12.5 percent last year to 15.3 percent, compared to 6.3 and 9.4 percent among men. Analysts said they see the jobless rate continuing to rise in the coming quarters due to plunging demand levels and concerns about future economic performance weighing on company hiring decisions. Greece’s jobless rate was 1.8 percentage points higher than the 16-country eurozone average, which was flat but near 12-year highs in June. But it is still much lower than Spain’s 20 percent unemployment rate. Under the fiscal plan agreed to with Brussels and the IMF, Greece aims to reduce its budget gap by 5.5 percentage points to 8.1 percent of gross domestic product this year and bring it under the EU’s 3 percent limit by 2014. In the process, unemployment is expected to rise to 14.8 percent next year and peak at 15.3 percent in 2012, based on European Commission projections. Protesting unions have been testing the Socialist government’s resolve to deal with a debt meltdown that has shaken global markets, blasting its policy choices for neglecting growth as the economy sinks. Greece’s largest unions GSEE and ADEDY, representing more than 2 million workers in the public and private sectors, said in a report earlier this week that austerity was stifling the economy. They said that policymakers were wrongly hoping for a recovery in economic activity by debasing labor costs and needed to come up with policies that redistribute income and boost consumption.