“The world is slipping into the Great Depression-like situation of 1929.” Finally, Rajan’s predictions are becoming a reality. But this time, the situation is much worse. The Greece Debt crisis is a major issue not only for Greece but also the rest of the world. Newspapers and magazines are flooded with articles on how the Greece crisis would impact the other countries of Europe and other continents. Some nations in the Eurozone are facing similar situation but now the spotlight is primarily on Greece. The nation is veering towards a possible bankruptcy after facing a terrible debt crisis. Since its crash, debts have reached a whopping 180% of their GDP, doubled poverty, increased incidents of migration, suicides and is void of basic health infrastructure. The serious tendency of Greece exiting the Eurozone or grexit, as the terminology been used nowadays, is set to create global financial shocks bigger than what was experienced during The Great Economic depression 1929-30. One of the key impacts of the recent state of affairs in Greece is on the impending situation of unemployment. The Greece debt crisis has adversely impacted Greece’s youth and the workforce with nearly 25% of the population without jobs.Almost every second person is the country is unemployed. How has this happened? It is primarily because of harsh austerity measures undertaken for various bailouts issued. The trio(The European Union, The European Central Bank and International Monetary Fund) had issued bailouts to stabilise the financial system of Greece but in return imposed stringent austerity measures which further worsened their situation. The main features of the bailouts were spiking taxes, wage cuts and liberalising the country for smooth functioning of businesses. Out-Migration from the country is on a rise As a result, the unemployment rate has fallen slightly from 25.8 % to 25.6%. And the population has withdrawn their funds from the banks before the central bank falls short of liquid cash.
Unemployment is high among the youth with nearly half of the young population without a source of living. However, unemployment rate for males fell from 24.2% to 22.2% and for females it has dropped marginally from 30% last year to 29.8% this year.
Apart from this, due to present condition of Greece, many investors would be reluctant to invest in Greece which drops down all hopes for bettering of the situation.
After the referendum on PM Alexis Tsipras’ decision was undertaken, the Greeks favoured the government through an overwhelmingly ‘No’ indicating a change in the bailout conditions. Tsipras’ government which has pledged to drive the country out of the catastrophe has been working on various reform proposals to be presented to the EU. Again as per the blueprint of the reforms, salaries have fallen, corporate taxes have increased and many state-owned enterprises are privatised. Again these measures can have a detrimental impact on the state of employment of the country.
However, time has changed now where the EU has finally decided to extend 7 billion euros to the weakening Greece but the bailout programme on a discussion stage and only time will tell what is the fate of Greece and its workforce.
2 Comments. Leave new
Well researched!
how unfortunate