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500K Greeks Have Zero-Income in First Half of 2011

The figures are merciless: 500,000 households in Greece have zero-income, as there is no household member with a work.  If you take into consideration that these data is based on employees only and do not include the self-employees, the reality must be much worst. The report prepared by the Bank of Greece (BoG) rinks the alarm bell, fearing an explosion of unemployment over 17% in 2012.

BoG-report states that half a million Greek households had not even one employee during the first half of 2011, while during the same period of 2010, there number was 400,000 households. In the first six months of 2011, the percentage of households with all members being unemployed stood at 12.9% (in 2010 it was 9.8%).

In 2011 those working (private and public sector) have suffered an average gross income decrease of  6.3%  after a 9.1% decrease in 2010.

Indeed in the first 6 months of 2011, incomes decreased by 9.4% due to salary cuts (3.1%) and lay offs (6.5%).

This situation is expected to continue into 2012 as the BoG provides that the labor cost per unit (ie the cost of operations for each product they produce, whereas the major cost is the payroll) in the whole economy will decline further by 2.7%.

BoG notes that in 2011 the largest loss in income is recorded at the employees of state-run enterprises. who suffer salaries decrease by 7.9%. In other sectors, gross wages decreases affect the public sector (4.9%), banking (4.1%) and the  private sector (1.7%).

Apart from the income reductions, significant are the data about unemployment.

According to the BoG, unemployment and underemployment (including those working at part-time because they can not find full-time jobs) rose in the second quarter of 2011 to 21% when the unemployment rate was 16.3%.

The Bank of Greece rings alarm on the strengthening of structural unemployment, because the number of  long-term unemployed (over one year in search of work) is increasing. It also warns  about the danger of simultaneous existence of high unemployment, empty job vacancies and inflation.

Additionally the BoG states a significant deterioration in paying back loans. The situation worsens as a result of the recession affecting the Greek economy. The data released by the Bank of Greece through the interim report on monetary policy, is indicative of the magnitude of the problem. In the time Jan-Jun 2011, a total amount of 6 billion EUR in loans was simply not paid back. (source:

PS If the Bank of Greece takes into consideration the series of so called ’emergency’ taxes then the income decreases will look much much different and depressing.

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