Greeks Bum Out Again
The Organisation for Economic Development tells us in a report published today that the outlook in the next six to nine months in the EU looks as if it is stabilizing. US jobs claims are down again this month and the country looks as if it is strengthening and firming up its economic activity. But, one country that is not partaking in all the positivity that is rebounding off the economic walls of countries is Greece. The Greeks are still in dire straits and it might just be another brick in the wall that will be shoring up their fate and sending them spiraling into many decades of poverty-stricken distress.
The Greeks have been in recession now for six long years. While economies around in neighboring EU countries seem as if they are shining with just a glimmer of hope that the recession is over, the Greeks are not partaking in any of that. Official figures published today show that unemployment is still continuing to rise. Although, given the austerity measures imposed by the troika of the EU, the European Central Bank and the International Monetary Fund, that should surprise nobody very much, least of all the Greeks. What did everyone expect after the troika imposed the laying off of thousands of civil servants in a bid to cut the national debt and reduce expenses of the state?
The jobless rate for May 2013 has just come out and Greece stands at 27.6% for that month. Some might say that it is a country that is staggering to regain control of its economy, but it looks more and more as if it has been truly brought to its knees in an attempt to fall into line with requirements that are being placed on provisos for the bail-out by the troika. €240 billion has been financed to keep the country from going under, but, surely there should be tell-tale signs that the economy is picking up if that money was going to do anything at all. Is it just throwing good money after bad or was there never any good money? Whatever happens, the Greek state will have a shortfall of €11 billion by 2015and the troika will most certainly have to step in again to bail them out. This will be exacerbated by the fact that a sales-tax relief has also been agreed by the troika to allow the Greek administration to reduce tax on food and drinks to 13% from 23% until the end of this year in the hope that it attracts tourists and increases spending. But, that tax break will cost the state a further €100 million in lost tax revenues that will have to be found somewhere else. It’s about as good as smoking gun evidence that points to the fact that austerity doesn’t work at all. But, neither does removing austerity when it’s too late. The Greeks will end up just robbing Peter to pay Paul. Or, in this case it’s robbing Georgios to pay Angela. Germany has been a staunch defender of the maintaining of austerity measures in the country. In the meantime, the IMF has swung back and forth from ‘austerity is good’ to ‘austerity is bad’ and now the Greeks really don’t know where they stand at all; except that they have little way out at all.
Over the past year, Greek unemployment figures have risen by a staggering 200, 000 and soon there will probably be more people out of work in the country than actually in it. It currently stands at 1.38 million people who are looking for jobs today. The number of unemployed in the country has grown by one million in justfive years. The figure for April was revised up to 27% and that is more than double what the average in the Eurozone is at the present time (12.1% for June). Jobless levels for the young people aged 15 to 24 in Greece now stand at 64.9%for the latest figures available. Austerity is becoming just another example of a vicious circle as more people lose their jobs and fewer people pay into pension funds or end up paying taxes as unemployment rises. Unemployment is set to increase to at least 28% in the coming year before it will apparently decline. But, unless economic activity sets in, that will just be an empty threat or an unfulfilled promise. It beggars belief just how any Greek citizen on unemployment benefits could currently live with the current level of €359.97 that is handed over each month for a maximum of one year (with a 30-60-day waiting period before they can collect anything at all). That figure is just 61% of what is the legal minimum wage for a Greek person today. There is talk of implementing further changes into the system. Anyone who has earnings from property or financial support from a spouse or children that amount to €6, 000 per year will be immediately disqualified from receiving any unemployment benefit at all.
The Greek administration is begging the EU to provide €170 million in regional development funding. But, that has yet to be approved.
The Greeks are coming dangerously close to getting to the level of unacceptable unemployment and austerity. What would happen if they defaulted on payment? Would the troika foreclose the country and repossess it?
They would have little room for maneuver and the situation couldn’t be any worse than it is now, could it?
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.