Recession in Greece is likely to end in 2024 but unemployment will remain above 20 percent for another three years. That would be …ehm… let me count… in 2016! Nice perceptive for the more than 1.3 million jobless. In a report published on Friday, the European Commission predicted the possibility of economic recovery in Greece already at the end of 2013. However with a nice question mark at the end of the road.
“The report on Greece titled “Contraction combined with a rebound in confidence – Is 2013 the last year of recession?”, the country has entered the sixth consecutive year of recession in 2013, but a recovery is expected to start by the turn of the year, supported by improved confidence and the return of liquidity. While hard data is still generally negative, softer survey indicators continue to improve since the relaunch of the adjustment programme last autumn.
Confidence is supported by the achievement of fiscal targets despite the recession, by the high credibility of the recently-legislated reforms and measures supporting the fiscal adjustment, by strong improvements in cost competitiveness and by the return of deposits and liquidity to the banking system following significant EU/IMF disbursements and debt-reducing measures.” (full story Athens News Agency)
The report based on data by representatives of Greece’s international lenders – EU, IMF and ECB – stresses that “progress had been made and public finances were improving”, but “more must be done to improve Greece’s tax collection system and shrink its still over-sized public sector.”
While the Greek government has said it aims to resume borrowing from bond markets next year, the European Commission noted in its report that full market access “will remain challenging in the years ahead” due to high debt levels.
The Commission estimates that Greece’s economy, after contracting 4.2 percent in 2013, will next year grow for the first time since 2008. It forecasts growth of 0.6 percent in 2014, but warns the recovery remains fragile and will depend on faster reforms.
“Should product and services market reforms not accelerate as foreseen under the program, positive economic growth could not return in 2014 as foreseen.
A failure to implement these reforms in time would thus amplify the social distress coming from very high unemployment and from the pressure exerted on the population by the prolonged recession and the wide-ranging economic and social adjustment.
The fiscal outlook beyond 2014 remains inherently uncertain,” as it “depends to a large extent on progress in strengthening the tax and social security administration.” (via miamiherald)
Unemployment rate is considered to peak at 27 percent this year before dropping gradually to 26 percent in 2014 and 21 percent in 2016, the report predicted.
Still 21% in 2016? That’s 700,000-800,000 jobless people, if I am not wrong. They will probably have to live on air and rainwater until unemployment drops to rate levels of a civilized and economic floating country.
The minimum wage will remain at 586/510 euro gross per month until unemployment reaches 10%. That would be some 10 years from now.
I wouldn’t wonder that at the end of the economic crisis, the social insurance funds won’t be able to pay pensions higher than 150 euro – due to high and long lasting unemployment rates that result to non-payment of social contributions. Not to mention that the low salaries (minimum wage) transfer no more than 100 euro per month per labor craft to pension funds. Logically, the pensions of those currently aged 15-35 would not provide them enough to survive their old days, as the minimum wage does not allow them to cover basic needs nowadays.
Having a roof over your head will be a luxury and bringing children in a such a society may be out of question as well.