Greek unions: Job recovery will take 20 years

ATHENS, Greece (AP) Greece's largest labor union warned Thursday that it expects unemployment to remain higher than pre-crisis levels for another 20 years, and demanded that international rescue creditors allow the government to reverse minimum wage cuts imposed last year.

The country is in a sixth year of recession, exacerbated by repeated spending cuts demanded by bailout lenders. It already has the highest unemployment rate among the 17 European countries that use the euro currency: It stood at 27.6 percent of the workforce, or 1.38 million people, in May.

A labor research unit of the umbrella union GSEE forecast in a 400-page report issued Thursday that joblessness will reach 29-30 percent at the end of 2013, and a stunning 31.5 percent a year later.

Current unemployment levels are the worst since 1961, GSEE said.

Unions are planning large weekend protests in Greece's second largest city, Thessaloniki, where conservative Prime Minister Antonis Samaras is due to give an annual speech on the state of the nation's economy.

More than 3,000 police officers are due to be on duty for the protest marches organized amid a government campaign of mass firings and mandatory job transfers in the public sector.

"We will be in Thessaloniki to express our rage at what is being done to Greek society," GSEE leader Yiannis Panagopoulos said.

"We are angry at the continued firings, the mass unemployment, and the thousands of households being into poverty and desperation."

Since being bailed out three years ago, Greece has relied heavily on draconian spending cuts and tax increases to try to balance its budget triggering a dramatic surge in unemployment from just below 10 percent in late 2009.

"The recovery of Greece's economy, starting in 2015, will be anemic ... and based even on the most optimistic scenarios, it will take at least 20 years to create a million new jobs and bring the unemployment rate back to below 10 percent."

GSEE's jobless predictions have generally proven to be more accurate that those made by the government and bailout lenders from the International Monetary Fund and eurozone countries.

But the Labor Ministry, pointing to a pick-up in job creation in recent months, described the union forecast as being based on the "worst possible scenarios, designed to predict catastrophe and create a false impression."

The government last year lowered the monthly minimum wage from 751 to 586 euros ($985 to $768), effectively scrapping negotiated rates set by unions and employers.

Debt inspectors from the so-called troika of the European Union, European Central Bank and IMF are due to return to Athens at the end of the month, with discussions set to include public sector layoffs, cost cuts in health care and reforms to the minimum wage setting mechanism.