European Youth Most Affected By Unemployment

july-18-03Growing unemployment in Southern European countries is hurting young people the most, new data from the OECD unemployment survey shows. The latest OECD survey paints a bleak picture of economic opportunity for youth in the struggling countries of Greece and Spain, where 60 percent of young people lack jobs.

Despite moderate economic growth in the UK, many of Europe’s markets are stuck in an unemployment crisis that threatens to reduce job opportunities for the young for over a decade. Overall unemployment in Greece is expected to reach up to 28.2 percent in the next eighteen months, based on economists’ predictions.

Other European nations, including France and Italy, are also faring poorly as youth unemployment continues to worsen. The French unemployment rate will reach 11 percent in the next eighteen months, with Italy’s rate exceeding 12.5 percent in the same time period, according to the report’s economic data.

With an increase in total unemployment, analysts are expecting youth to suffer the most from limited job opportunities. Over 60 percent of young people in Greece are unemployed. Economists and social commentators have predicted that the growing unemployment rate in Southern European countries could lead to civil unrest.

Other countries with growing unemployment concerns include Portugal, where a current 26.8 percent unemployment rate is predicted to grow to 18.5 percent in the next eighteen months. Ireland and Slovenia, at 13.6 percent and 11.2 percent each, are also expected to see increased unemployment due to minimal growth.

UK unemployment is expected to stay relatively steady over the next year, with a current figure of 7.9 percent expected to grow to 8 percent by early 2014. Of the OECD countries, only South Korea, Norway, Japan, Austria and Switzerland were recorded as having sub-five percent unemployment rates and real job growth.

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Greece Close to Reaching Bailout Deal, Leaders Claim

july-06-01Greece will soon receive another bailout from international lenders, the country’s leaders claim. The Greek government is in talks with lenders from other Eurozone countries over whether the struggling Southern European nation will receive any more bailout money from EU lenders.

The struggling economy is in the midst of a severe austerity program that will see thousands of public sector jobs cut in an effort to save money. The country’s initial job cuts will be the reduction of 4,000 civil service positions that are planned to be removed in the coming months.

Greece has struggled to balance its budget over the past two years, with the country facing a 6.6 billion euro debt to be paid by mid-August. The government’s job losses are part of the country’s agreement with IMF financiers, who have asked that Greece reduce its public spending to repay the loans.

The austerity measures, despite being important for Greece’s long-term stability, are proving immensely unpopular with the population. Anti-government protests by the Greek public have become increasingly common over the past year as many families face the prospect of losing income earners.

The Greek government also needs to redeploy 25,000 civil servants as part of its EU financing deal. The civil servants include over 2,000 teachers and 3,500 police, all of whom are to join the national forces. Despite Greece’s progress, the IMF has made it clear that Greece will need to implement its job cuts shortly to secure its deal.

The financing deal is one of several that Greece will have to secure in order to return to a level of financial stability that the public – and the EU – is comfortable with. The country may need to make further job cuts in the future in order to reduce its public spending and repay its IMF bailout loans.

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july-05-01Greece’s struggle to reduce its public sector spending has been a political hot point for several years. The struggling nation, which is one of several Southern European countries to experience sluggish public sector activity, is in the middle of long-term cuts to public sector spending in order to balance its budget.

The reduction in public spending is exemplified in Athens’ ‘ghost airport’ – the city’s former hub airport that’s been sitting dormant for a decade. Ellinikon International Airport, as it’s known, was closed down shortly before the city hosted the Olympics in 2001 and has sat largely untouched since its last days of operation.

Despite closing over a decade ago, the airport has made little progress in terms of development and repurposing. Unused planes, many of which are still serviceable, sit unused on the runways. The terminal buildings sit unused, with one terminal a new museum dedicated to the country’s aviation history.

A recent BBC piece on the airport took a look at its lack of progress, seeing it as an indicator of Greece’s sluggish pace of redevelopment. The airport’s land is worth a large amount of money and its central location in Athens makes it a valuable part of the city for businesses and public enterprise.

Despite this, Ellinikon’s 12-year closed period has produced little in terms of long-term plans for what to do with the airport. As Greece needs to raise money for its bailout payments – most of which will need to come from public spending cuts – a sale of the airport terminal and its land seems fairly likely.

The property, according to the BBC, is three times as large as Monte Carlo, making it one of Athens’ most valuable pieces of central real estate. With the pressure high for the Greek government to raise funds, this currently dormant piece of real estate may be Athens’ cash cow for making quick repayments on its EU bailout.

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When a global leader in the insurance industry is openly admitting that they have reduced their exposure to the crisis in the eurozone and have prepared for its demise, the world should stand up and take notice.

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This is the question which looms on everyone’s minds at the moment from political leaders to global investors. Since it is evident that the political atmosphere in Greece is at an impasse and there is mounting ‘anti-austerity’ pressure in the upcoming election, it is looking more and more as if Greece will default and pull out of the EU. In addition, it has been reported that news is coming out of Brussels that there are talks about a possible end of the euro.

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It appears as though once again Greece is on the precipice of defaulting on international loans as less than half of the country’s creditors voted in favour of a £172 billion bond swap. Along with 30 banks in Europe, HSBC, Barclays and the Royal Bank of Scotland voted for accepting the deal but this was not a high enough percentage to pass. In order to be free from defaulting, 95% need to be in agreement and those 33 banks are not enough to keep that from happening.

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