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Young Greeks feel economic crunch

BY BILL COONEY | JULY 08, 2015 5:00 AM

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Many young people are leaving Greece to escape the economic instability gripping their country.
University of Iowa graduate student Tasos Papachristoudis said many of the college-age people he knows still in Greece are out of work as a result of the crisis.

“For 18- to 30-year-olds, the unemployment rate is almost 50 percent,” he said. “There are almost no jobs, and the jobs that are available are temporary and low-paying, such as restaurant work.”

The Greek economic crisis is a result of the government borrowing a large amount of money in the years leading up to the “Great Recession” in 2007, said David Swenson, an economist at Iowa State University.

“People kept lending to them until their economy couldn’t handle it,” Swenson said. “The payment on the government’s debt was more then the economy could handle, so the Greeks needed money from the European Central Bank to keep businesses going in the country.”

Papachristoudis said a lot of the people he knew in school left Greece to look for opportunities elsewhere.

“Many of my classmates went to Western Europe for work or school,” he said. “Lots of people are exiting Greece right now in order to start their lives.”

The high unemployment rate is due to not a lot of business going on in Greece, said UI Professor John Solow, the executive officer of the Economics Department.

“Fifty percent unemployment doesn’t surprise me,” he said. “If you have any skill at all, you’re going to try to get out and go to where the jobs are.”

The unemployment rate measures the number of people who can work and want to but don’t have jobs.

Solow said the unemployment rate in the United States is around 5 percent. In comparison, Johnson County’s unemployment rate was 2.4 percent in May, according to the U.S. Bureau of Labor Statistics.

Papachristoudis said almost everyone in Greece has been affected by the financial crisis.

“My sister, who is a psychologist in public schools in Greece, has said she has seen children fainting during school because they are not getting enough to eat; it’s crazy,” he said. “Many schools in Greece don’t offer lunches, as they do here.”

UI graduate student in classics Thomas Rose, who spent two academic years in Greece, said he noticed more people affected by the crisis on his most recent trip to the country.

“There were a lot more homeless people on the streets than in years past,” he said. “But in other parts, it seemed completely normal — people eating in cafés and such, it was kind of strange.”

Rose agreed that the crisis has hit young people especially hard.

“It’s readily evident young people don’t have jobs,” he said. “Just by talking to a few people, you find out the situation.”

Solow said there are several different outcomes Greece could face.

“There is the possibility that Greece could leave the Euro Zone, or on the other hand, have some of its debt forgiven by the European Central Bank,” he said. “They have to be careful with forgiving the debt, however, because they don’t want to set the precedent of doing that when countries can’t pay.”

U.S. banks don’t hold a lot of Greek debt, so the risk to the U.S. economy is slim, he said.

Although Swenson said he doesn’t have an idea what is going to happen to Greece, he said the Greek economy could take up to a decade to recover from this crisis.

“I do know the Greek economy can’t pay back this debt,” he said. “Everybody is going to have to take a loss in order for Greece to start recovering.”

On July 5, Greek voters rejected another bailout by the European Central Bank that would have brought with it more money but also cuts to public services known as austerity measures.

“Austerity is necessary for the agreement, but it doesn’t help Greece at this point,” Papachristoudis said. “I have mixed feelings on the most recent referendum; it’s more complicated than yes or no, but now we have a chance to renegotiate.”

After the no vote in the most recent referendum, Euro Zone leaders have given Greece until Thursday to present a proposal for another bailout, and have called for a full European Union summit July 12 to discuss the crisis.

“There is no right or wrong answer to the situation,” Papachristoudis said. “They need to decide on something that allows Greece to be independent and stable.”


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