Greek youth unemployment has soared to a record 64.9pc as the country’s downward spiral continues almost unchecked.
 |
Athens is to lay off 15,000 public
sector workers by the end of next month to comply with European
Union-International Monetary Fund Troika demands Photo: AP
|
“Nothing as devastating as this has ever been seen in my country before,” said
Prof Yanis Varoufakis from Athens University. “The spirit of the Greek
people has been broken. They’ve stopped demonstrating and are licking their
wounds at home or leaving the country.”
Latest data from the Greek statistics agency showed the overall jobless rate
rose to 27.6pc in May, despite a mass exodus of the best-educated young
workers to the US, Australia, Britain and Germany.
The figure is likely to rise further as Athens lays off 15,000 public sector
workers by the end of next month to comply with European Union-International
Monetary Fund (EU-IMF) Troika demands.
“The manic attempt to keep Greece in the eurozone under conditions that are
not sustainable is turning the country into a sort of Kosovo, an EU
protectorate that produces little but surplus labour,” said Prof Varoufakis.
EU economics chief Olli Rehn said Greek austerity was “difficult but
necessary”, and should bear fruit in 2014.
There are at last signs the eurozone is bottoming out after the longest
recession since the Second World War, but the European Central Bank on
Thursday poured cold water on hopes for full recovery. The bank’s survey of
professional forecasters cut its long-range predictions.
The EMU economy will contract by 0.6pc this year, and eke out growth of just 0.9pc in 2014, and 1.5pc and 2015, too little to curb unemployment. The jobless rate will ratchet up to 12.4pc next year.
Fitch Ratings warned that Europe had not gone far enough with plans for a banking union to lower the risk of bank defaults. The new resolution fund (SRM) would scare away funds by concentrating losses on senior bank creditors. Investors were “likely to differentiate more between weak and strong banks” if they could not be sure of state-backing in a crisis.
This will make it harder for weak banks to raise capital, forcing them to deleverage by selling assets, further crimping lending. Roberto Gallo from RBS said small banks may have to slash assets by €2.6 trillion (£2.2 trillion) over the next three to five years to meet new rules.
Greek think tank the IOBE said Greece’s economy would contract by 5pc this year. It accused the troika of paying lip service to reform, relying instead on crude austerity to cut the budget deficit. This has proved self-defeating. The scale of economic contraction has overwhelmed any gains from budget cuts.
Brazilian finance minister Guido Mantega has called for the Greek rescue programme to be "revised and improved".
The IMF expects public debt to spiral to 176pc this year, and has warned EMU creditor states that they will have to provide substantial debt relief to put the country on a viable path.
http://www.telegraph.co.uk/finance/financialcrisis/10231989/Greece-becoming-new-Kosovo-as-youth-jobless-hits-65pc.html
The EMU economy will contract by 0.6pc this year, and eke out growth of just 0.9pc in 2014, and 1.5pc and 2015, too little to curb unemployment. The jobless rate will ratchet up to 12.4pc next year.
Fitch Ratings warned that Europe had not gone far enough with plans for a banking union to lower the risk of bank defaults. The new resolution fund (SRM) would scare away funds by concentrating losses on senior bank creditors. Investors were “likely to differentiate more between weak and strong banks” if they could not be sure of state-backing in a crisis.
This will make it harder for weak banks to raise capital, forcing them to deleverage by selling assets, further crimping lending. Roberto Gallo from RBS said small banks may have to slash assets by €2.6 trillion (£2.2 trillion) over the next three to five years to meet new rules.
Greek think tank the IOBE said Greece’s economy would contract by 5pc this year. It accused the troika of paying lip service to reform, relying instead on crude austerity to cut the budget deficit. This has proved self-defeating. The scale of economic contraction has overwhelmed any gains from budget cuts.
Brazilian finance minister Guido Mantega has called for the Greek rescue programme to be "revised and improved".
The IMF expects public debt to spiral to 176pc this year, and has warned EMU creditor states that they will have to provide substantial debt relief to put the country on a viable path.
http://www.telegraph.co.uk/finance/financialcrisis/10231989/Greece-becoming-new-Kosovo-as-youth-jobless-hits-65pc.html
No comments:
Post a Comment