Greek jobless rate drops for first time since 2008

Published on 08/03/2013 00:00

Greece’s jobless rate has fallen for the first time since a crippling recession began five years ago, helped by a bailout deal that propped up companies’ willingness to take on employees in the short-term.

Unemployment in the debt-choked nation dropped to 26.4 per cent in December from a revised, record 26.6 per cent a month earlier, state statistics service Elstat said yesterday.

It still remains the eurozone’s highest and is more than twice the bloc’s average unemployment reading of 11.8 per cent but it was the first time it had fallen since May 2008.

The rate has fluctuated at around record levels in recent months, with some economists – as well as a government-funded study – predicting an increase to 30 per cent this year.

Greece is still deep in recession thanks to the tax rises and searing cutbacks in state spending required by the European Union (EU) and International Monetary Fund (IMF) under its £210 billion bailout.

Only 3.7 million people currently work out of a total population of nearly 11 million.

A new EU/IMF funding deal late in November again eased fears over the country’s eurozone membership and may have boosted short-term employment, economists said.

Greece’s jobless rate has ­almost tripled since its debt crisis erupted in late 2009, as austerity measures caused a wave of corporate bankruptcies. The economy is said to be shrinking for a sixth consecutive year, by 4.5 per cent, in 2013.

Despite the drop, economists cautioned that it was too early to say if the labour market had hit a bottom.

“The economy continues to shrink rapidly and it is difficult to see a trend reversal in the first quarter,” said economist Nikos Magginas.