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The Greek Economy and High Unemployment

The Greek economy has been plagued by severe problems as a result of the country's high level of unemployment. By the end of 2013, this had risen to 27.5 percent, and it is now much higher, especially among young people. The problem is largely the result of a protracted contraction, which has resulted in a significant drop in the country's output as well as a downturn in regular economic operations. The country has also suffered greatly from a lack of competition as a result of higher labor and increasing manufacturing costs, which have made Greek exports uncompetitive. Both are key contributory factors to the high unemployment rate and the current deficit of nearly 15%. Therefore, it is imperative to identify some of the major policies the government is using to reduce this problem.

The Role of Social and Labor Market Policies

Although the origin of the recent rise in the long-term rate of unemployment in Greece is known to be predominantly cyclical in nature, the government is using the social and labor market policies. These are perceived to have a major role to play in the process of preventing the risks that have led to the sharp rise in the unemployment rate in the country. Recently, the Greek government has been quick on promoting a quick reintegration of individuals seeking jobs into the market through programs that equip individuals and enhance their skills enabling them to move into positions that are more productive when recovery is attained.

Government Efforts and Strategies to Help the Unemployed

Also, the Government of Greece has stepped up its efforts and strategy to help the unemployed since the recession began. Based on the latest news from the Greek National Reform Program, some of the policies being used are directed toward efficient, proper use and management of resources and reallocation. The aim is to improve labor market incomes, especially in the youth labor market, coupled with the enhancement of major economic sectors. The primary rationale for the utilization of this policy currently being utilized by the public employment service is to boost strategies put in place to boost creation as well as retention of jobs majorly through reducing non-wage costs. As such, the Public Employment Service Board has launched a vast number of policies that have had a double benefit which encourages access of as many unemployed people as possible in the labor market while at the same time undeclared work.

Measures to Facilitate Youth Employment

Additionally, the government is using a package of measures intended to allow young people together with newcomers to access the labor market. These encompass programs subsidizing enterprises focused on overseeing the recruitment of young graduates who have not attained the age of thirty-five years, and work experience programs. Other similar approaches include educational and vocational training in fundamental areas of the economy, for instance, tourism and construction, programs to foster youth entrepreneurship, and career and counseling orientation services which are directed toward enhancing prospects of employment.

Unemployment Benefit Policies

Further, the government has been depending on unemployment benefit policies which are based on insurance contribution. Comparing them with other countries, the benefits are significantly low, and take-up is limited. However, the program has had a significant advantage in the management of the problem as they provide income replacement at a flat rate for up to one year of unemployment. The benefits are made available to the people who make the insurance contribution. Therefore, this and all the above policies are critical for the government of Greece in dealing with unemployment facing the country currently.


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Matsaganis, Manos, and Chrysa Leventi. "Poverty and inequality during the Great Recession in Greece." Political Studies Review 12, no. 2 (2014): 209-223.

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November 23, 2022

Science Government


Language Economy

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Expertise Unemployment
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