People walk in the centre of Athens yesterday. The state statistics agency said that Greece’s jobless rate jumped to 25.1 percent in July, breaching the one-in-four threshold for the first time since the country fell into economic crisis and recession.
ATHENS: Greece’s jobless rate topped 25 percent and its biggest company said it would quit the country yesterday in a fresh blow to an economy that German experts warned cannot be “saved” without writing off more debt.
The announcement by drinks bottler Coca Cola Hellenic (CCH) that it was switching its primary listing from Athens to London, and moving its corporate base to stable, low-tax Switzerland, is a bitter blow to the debt-crippled nation.
The firm, which bottles Coke and other drinks in 28 countries from Russia to Nigeria, is Greece’s biggest by market value and is 23 percent owned by The Coca-Cola Co of the United States. It said its Greek plants would be unaffected.
CCH’s announcement coincided with data that showed Greek unemployment climbing for a 35th consecutive month in July to 25.1 percent from a revised 24.8 percent in June. The jobless rate has more than tripled since the country’s now five-year-old recession began.
Fifty-four percent of Greeks aged 15-24 years are out of work, fuelling violent protests against the tax hikes, spending cuts and public sector job losses demanded by the European Union and IMF in exchange for more than ¤200bn ($258.03bn) in loans since 2010.
Greece is still far off target. IMF chief Christine Lagarde, speaking in Tokyo, backed calls to give the country two more years, up to 2016, to cut its debt mountain to 120 percent of GDP from 165 percent in 2011.
The IMF is also pressing official lenders such as euro zone paymaster Germany to take a “haircut” on their Greek debt similar to that swallowed by private bondholders this year.
With elections in 2013, Berlin is resisting, but Germany’s leading economic institutes warned on Thursday that without further debt restructuring, the Greek economy would not make it.
“Yes, we don’t think Greece can be saved,” Joachim Scheide, head of forecasting at the Kiel-based IfW institute, said when asked whether investors in Greek debt would have to accept another haircut. “We need a restructuring of Greek debt; that would help Greece best,” he said.
German Chancellor Angela Merkel opposes any further restructuring, at least until after Germans vote next September. Her visit came as the Greek government is locked in talks with its “troika” of international lenders on more austerity measures to secure a next tranche of loans worth ¤31.5bn. Without further aid, Athens says it will run out of money by the end of next month.
Reuters
