By Spiros Sideris – Athens
The Greek economy grew at a rate higher than most member states until 2007, but then entered a deep recession. At the same time, the GDP per capita dropped and remains very low, compared with the pre-crisis era, and has reached the levels of 2000.
These are mentioned, among others, in the quarterly report of the European Commission on the state of employment in the EU released today.
According to the report, in Greece, the repercussions of the economic shocks on the income of households were significant. Between 2004 and 2007 household income grew at a rate higher than that of the economy, and then, from 2020, social transfers declined significantly. The European Commission also states that the incomes of vulnerable groups are those that suffered the greatest losses.
Specifically, the real income of the lower social layers is reduced by 30 percentage points compared to 2003, while in the other sections of the population the drop is in the region of 20 percentage points. At the same time, it is stressed that inequalities have increased in relation to 2010.
In the first quarter of 2014 full-time employees worked more in Greece, with 41.9 hours/week, followed by the Portuguese with the 41.6 hours, the Austrian with 41.5 hours, the Germans and Britons with 41.4 and 41.3 hours respectively.
According to the European Commission, the employment situation appears to have stabilised in Greece, but the long-term unemployment has reached historically high levels in the country, as well as in Spain, with the Commission noting that it is worrying that these rates are not dropping.
It is also noted that youth unemployment ranged from 10% or less in Member States affected to a limited extent by the deterioration of the labor market, such as Austria and Germany, and to more than 50% of the economically active population among young people in countries like Greece and Spain, where youth unemployment is three times higher than in 2008.
The improvement in labour productivity slowed down in the EU in the second quarter of 2014 as a result of reduced growth, says the Commission. However, there are significant differences between countries in the Eurozone, with Greece and Cyprus showing a large shrinkage, while in Estonia there is a marked increase.
On an annual basis, in the second quarter of 2014, employment decreased by 1.4% in Cyprus, by 1.2% in Estonia, 0.9% in Italy, 0.7% in Finland and 0.5% in Greece, estimates the Commission, stressing that despite recent improvements, the employment rate remains below the 2008 levels in the three quarters of the EU countries.
Furthermore, Spain, Cyprus and Greece were affected significantly with reductions that reached 9.8%, 10.3% and 14%, respectively, between 2008 and the first quarter of 2014. During the same period, employment increased significantly to 2.0% in Germany, Hungary 3% and 6% in Malta.
There is a difference of 27 percentage points between the highest employment rate (79.8% in Sweden) and the lowest (53.1% in Greece).
Long-term unemployment seems to be locked in the majority of EU countries, however, it continues to grow in countries where it was high, like Greece, Spain, Italy and Cyprus.
On an annual basis, the first quarter of 2014, Cyprus showed the highest increase by 2%, while long-term unemployment remains at historically high levels in Greece, 19.6% with an 1.9% increase on an annual basis, the Commission points.
In Greece, productivity improved in the first quarter by 0.2%, after a drop of 0.6% in the previous quarter.
Among the countries of the eurozone, Greece with -4.8% and Cyprus with -5.1% continued to show large reductions in total pay per employee in the second quarter of 2014. Finally, in the second quarter of 2014, unit labor costs continued to decline at high rates in Greece with -5% and Cyprus with -4.3%, says the Commission.