As Greeks took to the streets on Oct. 31 to protest a broken promise by the government not to make permanent a temporary property tax that effectively doubled the fee, statistics showed that the number of unemployed in the 17-nation Eurozone reached a record high in September as even the official end of a long recession failed to create jobs.
The news came as S&P Dow Jones Indices said that Greece no longer classifies as a developed market and the US accused Germany of hampering economic stability in Europe and hurting the global economy. The ranks of the jobless swelled by 60,000 to a record 19.45 million, according to Eurostat, the European Union’s statistics agency.
A sharp and unexpected drop in inflation also cast doubts over the recovery of the Eurozone, which just emerged from recession, and put pressure on the European Central Bank to act. The ECB has already cut its key interest rate to a record low to spur lending. But banks, companies and households are still too afraid to lend or borrow money.
“Latest developments reinforce our view that the ECB will end up cutting interest rates from 0.5 percent to 0.25 percent sooner or later,” IHS Global Insight’s analyst Howard Archer told the British newspaper The Mail, adding the ECB might take such action as early as in December.
A particularly gloomy stat was youth unemployment – it rose to 24.1 percent from 24 percent in August, but it still is 57 percent in Greece for those under 25, many of whom have already fled the country looking for work and a better life elsewhere. The overall rate in Greece is 27.6 percent, the highest in the 28-country bloc, with Spain at 26.6 percent. The overall rate is 11 percent in the EU.
S&P Dow Jones Indices, said that Greece no longer classifies as a developed market. The general consensus among participants is that emerging market status is a more appropriate classification due to the reasons including failing a minimum credit ratings criteria, and dramatic and consistent reduction in market size over the past few years.
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