The report of Labor Institute of the private sector union GSEE (INE) draws a grim picture of the Greek economy – despite the government narrative about the positive outlook.
“The Greek economy is looking for an upward venture,” said one of the INE directors who presented the report. However, “evidence and current data do not support the claim towards a stable sustainable development.
The scientific director of INE questioned the government’s estimates of 2018 growth by 2.8%, while he spoke of “illusions, delusions and insubstantial considerations.”
“The faint signs of improved data do not mean a change in the economic climate,” he added.
The president of GSEE stressed that the economy remains at the lowest point of decline after 2013 and underlined that there is no evidence to support the launch of a dynamic
At the same wavelength, GSEE President G. Panagopoulos stressed that the economy remains at the lowest point of decline after 2013 and there is no evidence to support the “launch of a dynamic increase”. The policy of internal devaluation can not create conditions of improvement and “the existing primary surpluses are neither viable nor sustainable,” he added.
Main conclusions of the INE-GSEE report:
1. The Greek economy is at a turning point. For the second time after 2014, it is looking for a way out of its fragile stabilization at its low level of activity after the great recession of 2010-2013.
2. There are no macroeconomic and productive transformations that would create essential conditions for the transition of the economy towards a dynamic and sustainable recovery.
3. Investments have stabilized at a level of 63% lower than in the first quarter of 2008, showing the huge investment gap in the economy. It is estimated that – based on the average growth rate of investments in 2016 – the volume of investments will reach the level of the first quarter of 2008 in the first quarter of 2033.
4. Consumption has stabilized at a lower level, i.e. by -24 percentage points compared to the first quarter of 2008. Its level will not be sustainable given the forthcoming austerity measures and if there is no strong shock in employment and incomes.
5. The volume of exports in real terms is far from becoming a key growth lever in the economy.
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6. There are high rates of underemployment, which have almost tripled during the crisis (from 99,000 employees in 2008 to 267,000 in 2017) and the disappointed unemployed, whose number has also more than tripled (from 37,000 to 109,000) in the corresponding period. [ I suppose the report numbers refer to underemployment and not to unemployment.]
7. The significant increase in uncertain jobs affects the change in wages, as the average salary of part-time employees was 397,67 euros in 2016. This development has serious macroeconomic effects as it essentially acts as a hidden austerity mechanism.
8. In addition, according to EU-SILC figures for 2015, 34.7% of full-time workers and 42.13% of part-time workers receive wages below the minimum wage. The fact that an increasing number of workers move around and below the poverty line is an indication of the fragile situation of Greek society.
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According to ELSTAT, the official unemployment was at 21.2% in June 2017. The decrease in unemployment rates in late spring and summer months is largely due to jobs in tourism sector and seasonal work in agriculture. Many jobs are state/EU-funded with the effect that unemployed have a job for maximum 8 months and a salary at the level of minimum wage. Then they are send back to unemployment and despair.
Only 1:10 jobless Greeks receives unemployment allowance of 360 euros
In this sense, real unemployment may be much higher.
Greece’s civil servants still receive much higher salaries than people in the private sector.
Austerity works ….