Sunday, September 15, 2013

Greece’s Horrific Unemployment Rate Finds A Way To Get Even Worse

Greece’s unemployment rate ticked up to 27.9 percent in June, setting another record high in the middle of the country’s sixth year of economic contraction. European authorities are weighing a possible third round of bailout funds for the country, but they would come with further austerity requirements of the sort that have shrunk the Greek economy by almost one quarter since 2008.

Quartz has a chart of the Greek unemployment rate since the beginning of 2006:


The first two rounds of bailout funding for Greece have been doled out in small parcels upon completion of various spending cuts, tax hikes, and layoffs required under the rescue plans. Those requirements have been eased for other struggling European countries, which helped the overall eurozone emerge from its record-long recession last month. Austerity supporters have admitted that their projections for Greece were far too optimistic. The International Monetary Fund had expected a 5.5 percent contraction in the Greek economy, with unemployment hitting 15 percent, before things turned around and the country returned to a growth trajectory.

Despite acknowledging their errors, international authorities have not allowed Athens to ease the pace or degree of austerity requirements. The country was forced to lay off 25,000 people in July and August. Last week the Greek finance ministry announced an improved forecast for economic growth: the economy only shrank by 3.8 percent in the second quarter, rather than the 4.6 percent expected.

The radical and unending economic pain has produced ugly human and political consequences. The birthrate has collapsed and the rate of stillbirths has spiked as austerity has forced layoffs in publicly-funded hospital staffs. A neo-fascist political party called Golden Dawn has seen its influence grow in the country.

Greece’s continued failure to cut its way back to growth reinforces the consensus among economists that austerity hurts far more than it helps. Meanwhile, the United States continues to pursue austere fiscal policy, with a showdown over spending levels likely in the coming weeks.

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