It Will Take 21 Years Until Unemployment in Greece Returns to Normal, IMF Official Says

Thursday, January 19th, 2017
Last Update: 12:16

Director of the European Department of the International Monetary Fund Poul Thomsen estimates that it will take 21 years until unemployment in Greece reaches pre-crisis levels.

The Dutch economist spoke in Washington on Wednesday during the presentation of the book “Europe’s Growth Challenge,” written by Anders Aslund and Simeon Djankov. He said that under current conditions the employment rate in Greece will reach the levels it was before the economic crisis in 21 years.

Thomsen also estimated that Italy needs 12 years to get unemployment rates back on track, Portugal needs 10 years and Spain will need six years to reach the 2001-2007 employment levels. He noted that in those countries, structural unemployment is high, inflation is low and debt has increased.

The average unemployment figures in the euro zone, based on IMF estimates, is approximately 10%, with structural unemployment being between 7 and 8%, Thomsen said.

Regarding austerity, the IMF official argued that this is not a problem in Europe, adding that the European Union has made a lot of progress in its structure, the banking union and the wall of protection.

However, Thomsen noted, the euro zone needs a more accommodative monetary policy and a tighter banking union. He noted also that the problem of the euro zone is that it is a monetary union, but not a political union.

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