ECONOMY

Unemployment tops problem list

Prime Minister George Papandreou announced a 2.6-billion-euro plan yesterday to help the jobless weather the country’s worst recession in decades and train workers, describing unemployment as Greece’s main problem. With the jobless rate expected to reach 15 percent in the next two years as a result of austerity measures that include drastic spending cuts and plans to restructure loss-making public utilities, the package aims to help create or retain 670,000 jobs, officials said. «Our aim is to help the citizens that are hit hard by the crisis… The Number 1 problem we face is unemployment,» Papandreou said at a meeting with social partners. «Despite being at the heart of the crisis, we are trying to mobilize all the mechanisms that we have at hand.» The plan includes a 990-million-euro program to maintain jobs by helping businesses pay social security contributions, as well as subsidies for women setting up their own business and training for people over 50. The government has said the unemployment rate, which stood at 12 percent in July, is set to rise to 14.5 percent next year and 15 percent in 2012. The economy is seen as contracting 4 percent this year and 2.6 percent in 2011. Athens is currently receiving rescue loans from a three-year 110-billion package from the International Monetary Fund and its eurozone partners. In return, the government has imposed strict austerity measures, including trimming pensions, raising taxes and cutting civil servants’ pay, in an effort to overhaul its debt-ridden economy. The crisis broke out late last year after the recently elected Socialists drastically revised the country’s budget deficit upward, saying the previous conservative administration had been fudging statistics. The European Union’s statistics agency, Eurostat, is set to further revise the deficit and debt figures for the period 2006-09. But the government insists that it will still meet its targets of reducing the deficit to 8.1 percent of gross domestic product this year and 7.6 percent by the end of 2011. The upcoming revision «in no way changes the targets or the ability of the Greek government to achieve the goals it has set,» Finance Minister Giorgos Papaconstantinou told reporters in Luxembourg yesterday, where he was attending a meeting of EU finance ministers.