Greek unemployment rises to record high

Greece's statistical agency says the unemployment rate in the debt-ridden country rose to 16.2 per cent in March, with the number of jobless increasing by a massive 40 per cent from a year earlier.

The agency said in figures released Wednesday that the unemployment rate had increased from 15.9 per cent in February.

The total number of Greeks out of work stood at 811,340 in March this year, compared with 578,723 in March 2010. That's the highest level since 2004, when the Greek government first began releasing official data.

The Greek statistics agency said the unemployment rate among those under 24 hit more than 42 per cent during the month.

Greece has imposed strict austerity measures to meet the terms of a $161-billion international bailout, but more spending cuts and tax hikes are planned as Greece's government still spends far more than it earns every month.

The yield on two-year Greek government bonds spiked to 23.72 per cent after the data was released, Reuters reported. A rate comparable to that offered on most credit cards is an indication that investors have lost confidence in the Greek government's ability to pay off their debts. High yields tend to draw in only the most speculative of buyers.

Belt tightening

New austerity measures designed to live up to the terms of that loan will likely cause the jobs picture to get even worse, as public sector employment retracts.

The government is also pushing through a privatization program for most of the country's public utilities. Workers at state companies facing privatization have called their first strike against the plan for Thursday. Transport firms, banks, post offices and the state television and radio stations are joining in the strike.

Prime Minister George Papandreou is also faced with increasing frustration from within his own Socialist party — and among his ministers — over the new austerity.

Papandreou suggested after an informal Cabinet meeting on Monday that he was open to holding a referendum on austerity measures, although government spokesman George Petalotis said the following day that there were no immediate plans for such a vote.

Papandreou's socialist government faces re-election next year, a daunting prospect considering most left-leaning European governments have been turfed out of office since the recession began in 2008.