While the international press continues to celebrate Greece’s recovery, the reality on the ground becomes bleaker, less sustainable, and nastier than ever. In this post I shall be conveying the grim news from two fronts: the labour market and the government’s finances.
Fewer jobs, fewer people: A labour market in steady decline
Unemployment fell in Greece in February to 26.5%, for a fifth consecutive month. Excellent news, surely. Not in the slightest. In January there were 3 million 614 thousand Greeks in paid employment. In February there were 5 thousand fewer people with jobs (3 million 609 thousand employed). (See here.) So, how come the unemployment rate declined? Simple: The unemployment rate is the ratio of those out of work (but seeking work) and the labour force (those in work and the unemployed looking for work). The continuing crisis has, once more, shrunk the denominator, as Greeks continue to leave the country in droves and others become discouraged and stop looking for work. So, even though employment has dropped, the labour drop has declined even faster. Rather than a cause for celebration, this is a genuine reason to grieve for Greece’s labour market. (Unless of course you are a speculator, or an establishment politician, making a mint from the rumour of Greek-covery…)
Greek Government Deficit
Regular readers will recall my recent exchange with Eurostat, in which I accused Eurostat, Athens and Berlin for conspiring to bring back Greek Statistics. The bone of contention was (A) the creation of fake white holes in pension and local authority balance sheets and, of course, (B) the ongoing ‘tradition’ of under-reporting the state’s (permanently rolled over) arrears. It is now official: In March, the general government’s balance sheet went into a small deficit (a little over €1 billion) while officially acknowledged arrears (mostly owed to social security and hospital suppliers) went up from €5.07 billion, in February, to €5.20 in March.
So that you can smile ironically when you read, elsewhere, that Greece is on the road to an impressive recovery…