How Taipei is Building the City of the Future Sponsored This content is created collaboratively with one of our sponsors.
Unemployment hit a new high just as the busy summer tourist season got underway. Although an influx of visitors helps curb further joblessness this summer, Greece will need more than beautiful coasts and planes full of tourists to fix its economy.
Greece’s jobless rate hit a new record high of 27.6 percent in May, official national data showed on Thursday as the country staggers under austerity linked to its international bailout.
Record joblessness is a nightmare for Greece’s two-party coalition government as it scrambles to hit fiscal targets and show there is light at the end of the tunnel after years of unpopular tax rises and cuts to wages and pensions.
Unemployment rose to 27.6 percent from an upwardly revised 27.0 percent reading in April, according to data from statistics service ELSTAT and was more than twice the average rate in the euro zone which stood at 12.1 percent in June.
The latest reading was the highest since ELSTAT began publishing monthly jobless data in 2006.
Greece and Spain have been hit with similar levels of sky-high unemployment, with latest Eurostat data showing seasonally adjusted unemployment in June at 26.9 percent for Greece and 26.3 percent in Spain.
Spain itself does not publish monthly jobless figures directly comparable to Greece’s own data, but Madrid’s quarterly data shows its rate peaked at 27.2 percent in the first three months of this year.
“Increased employment in tourism cannot offset the restructuring in many sectors of the economy and continuing weak demand,” said economist Nikos Magginas at National Bank.
However, he said improving exports and a strong tourism season would help to contain the further rise in joblessness expected this year.
Tourism accounts for about 17 percent of Greece’s economic output and one in five jobs. Revenues are seen rising 10 percent in 2013, to 11 billion euros, on the back of an expected record 17 million visitors.
Data showed that those aged 15 to 24 remained the hardest-hit as the jobless rate for this age group registered 64.9 percent.
With the economy suffering its sixth straight year of recession and 1.38 million people officially without jobs, the pain is felt across the board. Borrowers fall behind on loans and fewer workers pay into pension funds.
A turnaround will take time to be felt in the labor market even if recovery sets in next year as authorities project. The central bank projects unemployment will peak at 28 percent before it starts to decline in 2015.
Scrambling for ways to ease the pain for Greeks, Athens wants to tap about 170 million euros of EU regional development funds to launch job programs and has asked the European Commission to approve the move.
Reporting by George Georgiopoulos and Renee Maltezou. Editing by Stephen Nisbet.
Copyright (2013) Thomson Reuters. Click for restrictions