Underemployment in Greece at 72 per cent underlines market crisis

Almost threequarters of Greece's part-time workers are underemployed, according to official figures out on Monday which underline the dire state of the labour market in the European Union's most crisis-hit areas.

Just over 72 per cent of Greece's part-time workers said in 2014 that they worked less hours than they would have liked to, according to Eurostat's annual poll of the EU labour market. In Cyprus and Spain, the figures were 66 per cent and 57 per cent respectively.

Across the EU more than a fifth of part-time workers, or 9.8m people, were underemployed. More than two-thirds of them were women.

The labour force survey sheds light on the troubles facing Europe's work force. In the 28-member bloc, 9.8 per cent of workers, or 23.9m people, are without work. In the eurozone, the headline figure of 11.3 per cent masks vast differences between unemployment rates around the region.

In Germany's Oberbayern, there is virtually full employment with the jobless rate at 2.5 per cent in 2014. By contrast, among the areas worst hit by the economic and political crisis, in the Spanish region of Andalucia the jobless rate is 34.8 per cent and in Greece just over a quarter of the entire labour market are without work.

While the combination of cheap oil, a weak euro and more aggressive monetary policies from the European Central Bank have spurred hopes of a stronger economic recovery, growth remains too slow and confidence too fragile for companies to add jobs in substantial numbers.

"Even though we are starting to see unemployment numbers become more encouraging, we are coming from a very weak position," said Bert Colijn, senior economist at The Conference Board, a research association. "These figures underpin that. They show just how much slack there is in the European labour market."

The poll has important implications for the region's monetary policy makers, who must weigh up the degree of economic slack -- or spare capacity -- in the labour market when deciding how much support to provide for the region's economy.

The latest European Central Bank staff forecasts showed that economists at the central bank expect unemployment of 9.9 per cent in 2017, when the projections imply policy makers will start to consider raising interest rates from record-low level of 0.05 per cent. However, signs that a sizeable chunk of the region's part-time workers remain underemployed could lead policy makers to delay rate increases.

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