Greek Unemployment The Big Risk

People mingle outside a Greek Manpower Employment Organisation office in Athens

– Antonis H. Diamataris – Publisher/Editor of The National Herald

The unemployment statistics released recently for Europe will supply all political parties with ample material to manipulate.

Even the Greek government can claim that at last something is happening as the economy continues to fight for its life.

Regardless of any political exploitation of the subject, the substance of the report is whether the country can turn the economic page before there is a social explosion.

The figures are depressing: 27 percent unemployment in August: even though it remained stable from the previous month, it was up from 25.5 percent last August, or higher by 88,242 people.

But the risk of a bitter harvest – literally – stems from the continuing leaps of in the unemployment rate among young people, from 58.2 percent last year for those under the age of 25, to 60.6 percent now, with particularly high rates for women.

There was some “positive” news: the economy declined by “only” 3 percent over the past year, as opposed to the 6.7 percent year-on-year drop last year

Nobody can be happy with shrinkage of 3 percent, but at least it’s something to perhaps feel a little better about.

But such levels of economic contraction, or even much smaller declines, will not contribute to solving the country’s main challenge: cutting youth unemployment markedly. And that can lead to uncontrollable situations.

So what Greece needs is not slower shrinkage, but growth, a rapid rise in economic activity to quickly absorb the unemployed, something which is not in sight, not even a fantasy yet.

A key reason is that not enough deep structural reform has taken place.

Greek society has shown admirable patience and understanding over the past four years, perhaps due to a sense of guilt, knowing well that the citizens also bear responsibility for how the country came to reach such dire straits.

Will the people continue to show the same understanding for much longer or will they take a gamble of historical proportions with a SYRIZA government?

The latest poll shows that despite what has happened recently, support for Golden Dawn remains steady and that has a lot to do with unemployment rates.

And if someone is exposed as a member of Golden Dawn, how likely is it that he will abandon them later if there is a slight improvement in the economy?

That is why I posed the question whether a likely improvement in the economy will occur in time to prevent disorder or keep some “crazy person with a gun” from provoking the beginning of an internal conflict, as Nikos Konstandaras recently wrote in The New York Times.

Recent events show that the Eurozone and Greece are marching in opposite directions since the structural changes are not taking place quickly enough and unemployment continues to break historical records. It remains unclear whether there is still room for a sense of common cause to take hold.