Bad Checks in Greece Soar 43% as Credit Dries Up; Greek Unemployment Rate Hits Record High 16.6%; Hey I have an Idea!
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It is pretty tough to pay bills when you have no job, no money, and the unemployment rate is both high and soaring.
Greek Unemployment Rate Hits Record High 16.6%
Inquiring minds note Greek unemployment rate hits all-time high
Thursday August 18, 2011: Unemployment in Greece grew at a stunning rate of 1,200 people per day in May, climbing to 16.6 percent of the Greek work force that month, according to data released on Thursday by the Hellenic Statistical Authority (ELSTAT).Bad Checks in Greece Soar 43% to 1.4 Billion EU as Credit Dries Up
The total number of jobless Greeks soared above the 800,000 level for the first time in the last few years, reaching 822,719. Twelve months earlier, in May 2010, the figure stood at 602,185, or 220,534 fewer jobless people. In percentage terms it was at 12 percent, having been at just 6.6 percent in May 2008.
The steep rise in unemployment is obviously due to the recession of the Greek economy in the last couple of years and the austerity measures imposed, forcing a considerable number of enterprises to close down and thousands of jobs to be lost without being replaced in the market.
The situation is worsening by the month, as in April 2011 the unemployment rate had stood at 15.8 percent, which means an additional 36,260 people lost their jobs within May alone, or about 1,200 per day.
As usual, the problem is greater among women and the young. One in every five women (20 percent) seeking a job in May could not find one (against 14.1 percent for men), while 40.1 percent of people aged between 15 and 24 were unemployed. The worst-hit region was Western Macedonia, with a 24.9 percent jobless rate.
With no jobs and no credit, one should not be shocked to learn Bad checks, unpaid bills of exchange stifling the market
Rubber checks soared by over 43 percent year-on-year in the first seven months of 2011, asphyxiating the market further as credit lines continue to dry up.Hey I have an Idea!
Data released yesterday by the Tiresias bank information system showed that bounced checks in the year to July amounted to 1.38 billion euros, up by 43.3 percent from the same period in 2010, while unpaid bills of exchange rose to 86,257 units, totaling 134,476,048 euros and representing a 6.47 percent increase compared to last year.
Given the growth in bad checks and the deepening recession in the real economy, it is almost certain that their total amount will exceed 2 billion euros by the end of the year.
A survey by the General Confederation of Greek Small Businesses and Traders (GSEVEE) has shown that just under half of the companies that make transactions through checks possess checks that have already bounced (37.9 percent) or are at risk of doing so (7.3 percent).
This phenomenon, which is set to grow, is causing a chain reaction in the market as it is also threatening the existence of healthy enterprises.
Actually, I just want to recap ECB president Jean-Claude Trichet's failed idea.
- Let's bailout the bondholders
- Let's bailout the banks
- Let's raise taxes
- Let's expect the situation to improve by 2012
- Let's ignore impending recessions
- Let's stick with growth estimates for Greece, Spain, Italy, and Portugal
I agree with the forced productivity improvement ideas, cutbacks in pension plans, increase in retirement age, and the liberalization of work rules. I vehemently disagree with most of the rest of the bargain and ECB president Trichet's solution as implemented.
Banks eventually took haircuts on Greek bonds. Spain, Ireland, and Italy coming up.
Mike "Mish" Shedlock
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