Greek unemployment hits new record

Greece's unemployment rate reached a record high in February, according to date released Thursday, as Europe's politicians continued to discuss how to resolve the region's debt crisis.

Youth jobless rate hits 54% as 900 Greeks lose their jobs every day, on average

Greek socialist leader Evangelos Venizelos, left, said he made progress towards forming a coalition government after meeting with the leader of the left-wing Dimar party, Fotis Kouvelis, right, in Athens Thursday. (Louisa Gouliamaki/AFP/Getty)

Greece’s unemployment rate reached a record high in February, according to data released Thursday, as Europe’s politicians continued to discuss how to resolve the region’s debt crisis.

The jobless rate hit 21.7 per cent in February, and rose to 54 per cent in the 15-24 age group.

The statistics documented the hardship that led voters last Sunday to reject the austerity that has come as a condition for an international bailout.

On average, more than 900 Greeks have lost their jobs every day over the year ending in February, for a total of 1.1 million, a 42 per cent increase over 12 months.

And the country remains mired in a recession, now in its fifth year.

Efforts to form a government continue

The third-place finishers in Sunday’s vote, the Socialist party, took their shot Thursday at trying to form a coalition government after the failure of the top two.

Socialist leader Evangelos Venizelos has three days to strike a deal. If he fails, there will be one more effort, coordinated by President Karolos Papoulias, to have the parties agree on a coalition.

Later, Venizelos said the chances were good for a coalition because a small left-wing party close to his position on continued austerity could give him the majority he needs.

If he fails, new elections will be called for early June, prolonging the political uncertainty.

At the same time, German Finance Minister Wolfgang Schaeuble warned Greece must stick to the austerity measures it agreed to in order to get aid and stay inside the eurozone.

Marshall Auerback, a director with Toronto-based investment advisory firm Pinetree Capital, told CBC News he expects there will be a second election, which will force the issue.

"Either Germans and the other European Union members will relent (in their demands for continued austerity) and they will be facing the possibility of Greece actually leaving the eurozone, at which point the problem becomes Europe’s, not Greece’s, anymore."

The issue then, Auerback said, is whether the European Central Bank will be prepared to directly shore up European banks to prevent credit from freezing up as concerns grow about the spread of financial contagion.

And he says the Germans have to realize that they must share the costs of restoring confidence because they have benefited significantly from the currency union.

"Germany’s in the same mess. This whole financial architecture’s flawed and Germany might well occupy the penthouse suite, but it’s the penthouse suite of a roach motel and they’ll get hit as well," he said.

With files from The Associated Press