World Economy

No End to Greece’s Economic Imbroglio

Unemployment remains around 23.3%,  the highest in Europe.Unemployment remains around 23.3%,  the highest in Europe.

With Europe facing pressing crises including the refugee crisis, economic slowdown and political disintegration following the Brexit vote, it’s easy to forget that Greece’s political and economic crisis dominated headlines last summer.

One year on and a third bailout worth €86 billion ($96.1 billion) later, arrived at after tortuous negotiations between Greece and its lenders, and the situation in Greece is a game of two halves with many Greeks suffering—and some trying to make something out of a bad situation, CNBC reported.

Greece’s government has been forced to make widespread spending cuts over the course of its three separate bailout programs, making life harder for most Greeks of ordinary means. The cuts have affected all ages with unemployment rising to the highest level in Europe.

A survey by independent analysis firm DiaNEOsis in June revealed that many Greeks were facing an increasing struggle to get by. Extreme poverty in the Greek population (of 11 million people) had risen from 2.2% in 2009, to 15% in 2015, the public opinion survey of 1,300 people showed, with 1.6 million people now living below  extreme poverty.

One resident of the northern Greek city of Thessaloniki, Evangelos Kyrimlis, told CNBC that the Greece’s crisis had taken its toll on society, both at a local and national level.

“Disillusionment is the first big thing that’s going on,” he noted. “Nobody believes in anything anymore.”

“The second big thing is withdrawal. People have retreated to their families and fight only for the family survival. Society has been fragmented,” he said. Kyrimlis works for his partner’s family firm, having returned to Greece after working for an engineering consultancy in London.

Returning to Greece in the midst of the country’s financial breakdown, he said he now noted an increase in animosity between people, saying there was a “widespread hatred not directed to anyone in particular, it’s like all against all.”

Meanwhile, unemployment remains around 23.3% at the last count in April (the highest in the European Union) and the economy is crawling out of recession, trying to raise investment and growth.

Still, there is reason to hope. Last Friday, Greece reported a surprise 0.3% increase in gross domestic product in the second quarter, far surpassing expectations for a contraction of 0.2%.

It also revised its first quarter figures, reporting a 0.1% decline rather than the previously reported 0.5% fall. Still, on an year-by-year basis, the economy is contracting by 0.7% in the second quarter compared to the same period last year.