How come Greece has the highest unemployment rates in the EU?

Greece is a country in southeastern Europe with thousands of islands throughout the Aegean and Ionian seas.

Influential in ancient times, it's often called the cradle of Western civilization. Athens, its capital, retains landmarks including the 5th-century B.C. Acropolis citadel with the Parthenon temple. Greece is also known for its beaches, from the black sands of Santorini to the party resorts of Mykonos. So, indubitably, a very beautiful, colorful and vibrant country.

Following the economic crisis of the years 2007 – 2008, the global stock markets collapse has taken its toll on the economy of Greece as well. According to online sites like tradingeconomics.com, and statista.com; in the period between 2008 and 2014 the unemployment has risen dramatically from a mere 7-8 percent in 2008 to the staggering 28 percent in 2013-2014. As of the current time period, the unemployment rates are in decline, and in a 5 years lowest point, but still the highest in the EU at 20.1 percent for June 2018. For the summer season, it is reflected on the infographics that this stat has fallen another 1% so currently, as of August-September 2018; it is standing at 19.1 percent, which is still the highest in the EU, followed by Spain at around 15.2%, Italy at 10.9% and France and Croatia at 9.2%. The Government expects the unemployment to fall to 18.4 percent this year as the economy recovers, based in its 2018 budget.

To import these statistics into our youth context, we will cite the latest available seasonal statistics for June 2018, which tell us, that for the age group between 15 and 24 y.o. the unemployment rates are at 39.1%, which is around 4% decrease from the same period of the previous year. For the age group between 25 and 34 it stands at 23.2% from 27.3% for the last year.

With an overall GDP of around 195 billion USD in 2016, Greece is far away from being the poorest country in the Balkans. This statistic averages at about 18,000 USD per capita. Which is again, the highest in south-eastern Europe, even if we regard the non – EU countries. The key here is the national debt – 180.8% of the gross domestic product for 2016, which in actual numbers is around 350 billion USD for 2016. The EU have tried to develop policies to bailout Greece from the economic crisis, and arguably bankruptcy, with a number of tranches from the EU and World bank towards the struggling Greek economy, which resulted in this massively negative economic statistic. It is unknown how long it will take for the country to get out of this situation, but it is easy to see that it will take for more than one generation’s tax money to return this amount, which is not small by any margin, and the direness of a situation like this comes from the fact, that the annual budget still has to be “filled” somehow, so it is not clear, from where the Greek people will be able to find the money, to repay this relatively massive, what is really enormous international obligations, and still be able to run their day-to-day economy.  Really it looks like they have a pretty hefty task on their hands. We sincerely want to wish them luck and success with this uneasy process.

What are the more particular factors, that world economic analytics argue, that have led to developing such economic situation in Greece are things like:

Inefficient Pension System

Greece spent 17.5 percent of its economic output on pension payments, the most in the E.U., according to the most recent Eurostat data from 2012. But with existing cuts, that figure has fallen to 16 percent, Reuters reported. Italy, France and Austria each spent about 15 percent of their GDP on pensions in 2012, according to Eurostat.

Benefits

Government employees have had some of the best worker benefits in Greece. For example, an unmarried daughter used to receive her dead father's pension, though that specific practice stopped after the bailout agreement was made in 2010.

Some workers received atypical bonuses for showing up to work on time, but these bonuses were paid so workers were not paid higher pensionable salary. Either way, it's a practice that austerity measures eliminated.

Early Retirement

In 2013, Greece's retirement age was raised by two years to 67. According to government data, however, the average Greek man retires at 63 and the average woman at 59.

And some police and military workers have retired as early as age 40 or 45.

High Unemployment and Work Culture Issues

A man aged 39, who works in a store in Athens selling organic products, told a news company he's concerned that his boss does not have the money to pay him tomorrow. Still, he said, "It's not too serious. First of all I could go a bit earlier in the evening and go to the beach to surf. Secondly, I will have a ready excuse not to pay electricity and water bills that have just arrived home.

"It’s kind of endemic and built into that culture that if I don’t get paid, I can’t pay you. It’s not the right foundation culturally for the economy to come out of this tailspin," said John Challenger, CEO of global outplacement and executive coaching consultancy Challenger, Gray and Christmas.

Tax Evasion

The country has struggled to collect taxes from citizens, especially the wealthy, which is a problem when Greece's national debt is 177 percent of its GDP. Italy’s debt is about 133 percent of its GDP as of 2014, according to Eurostat. Greece's far-left government has said it wants to target wealthy tax evaders, but creating a more equitable tax system has been challenging.

We want to stress here, that even if some of these factors, again mentioned by some undisclosed economic analysts on the world level, even though if beneficial to the people, and making their lives easier, are key to developing and sustaining an economic growth, or exactly the opposite - destroying it.

Some of the large companies in the world’s private sector have created thousands of jobs in some of the countries which have particularly dire unemployment rates, creating a beacon of hope. However, some industries such as information technology, face the conundrum of a deficit of qualified workers in the local unemployed work force, and have to hire workers from abroad instead of helping decrease the local unemployment rates. This skills mismatch has no quick solution, as workers require time for retraining to fill the openings in the growing science-, technology-, or engineering-based jobs, and too few students choose degrees that would help them obtain these positions. Some of the newly “franchises” had to resort to “importing” this kinds of specialists from other, even non-EU countries in order to fulfill these positions with a relatively high skill cap. Still a lot of young people prefer to study the social professions, when following their high- school with a higher education, even though the difference in payment is obvious. This is definitely to show us how important it is when we choose our education and future fields and positions of interest. And hopefully also a very big writing on the wall for the governments, not to let such situations develop, so they have to resort to drastic measures to fix them afterwards, and also not to repeat the mistakes of their colleagues in power, as the old saying suggest would be a very wise thing to do.

Here is also to philosophize а little bit, about the importance of the soft skills and the priority, that we should give them, when drawing the strategy for our future and development. Yes, arguably it is very, very important to have knowledge on how to manage conflicts, time, stress and even intercultural relations, because these are abilities that will greatly help in any working process, but this is only given, if we have a solid base of hard skills, and actual certified knowledge, that we could, again arguably, only obtain from our formal education. This by presumption is what will lend us at the long-dreamed highly-paid and stable job position. This being said, we would point out here, that both sets of skills are extremely important for being a successful young person, if we look from the broader perspective and exclude the individual cases.

So firstly, we should do what is needed for us to do to secure our personal social stability, and secondly when being a stable and self- sustained person, we wouldn’t have to worry that much for the political and economic situation, respectfully of the countries that we are living in. Of course it is always a very good, and noble, thing to care about the others well-being, but let’s not forget that before all, we have to ensure our own survival and provide for the living of our own families. Arguably the “I do not care” attitude of the politicians, economists, young people and older, for that matter, on strategizing about this kind of matter for the future, is what brings this kinds of scenarios to being the bitter reality in the first place. So we should care, but with the proper priorities in life. We have to be sustainable when thinking economics, we cannot live from day to day. And at times it is better to save at least a little, instead of burning out everything that we get our hands on right away, on the personal, micro and macro levels. Because there is always someone who’s life and future is on the line, and on the smallest of scales it is us ourselves in person.

I think this will be it for this week, friends. We revised a little about the economic situation and unemployment in Greece, and tried to relate this to the youth employment and the possibilities for the future of the young people, which we hope will get only brighter and brighter. Not only, in Greece and therefore in the Balkans, but maybe in the world as a whole.

From me, your author, here in the Youth Informational Center, Info Sega in Prilep, Republic of  Macedonia, Σε αγαπώ (s'agapo), and αντιο σας (antio sas).

Written and summarized by: Velin Nedkov