Expert: Cuts could contract Greek economy

Aug. 10, 2012 at 12:08 PM
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ATHENS, Greece, Aug. 10 (UPI) -- The billions of dollars in spending cuts Greece has been asked to make could contract the economy and inflate unemployment, a labor expert said.

Savas Robolis, an economics professor and director of the Labor Institute, offered the bleak outlook after the latest unemployment figures indicated the jobless rate topped 25 percent in May, reported Friday.

Spending cuts of $14.2 billion over the next two years will lead to the economy contracting by about 5 percent in 2013 and unemployment rising to about 29 percent, he told Skai TV.

Robolis said 674,000 jobs were lost during the last four years and that, at the current rate, it would take until 2023 for the employment rate to return to 2008 levels.

He said the youth unemployment rate of 53 percent is a major problem, noting if graduates do not enter the job market within five years of finishing, much of what they learned becomes outmoded.

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