Europe’s many jobless see little light from glimmers of recovery

Published Wed, Apr 9 20141:13 AM EDT

Liz Alderman

When Kostas Polychronopoulos lost his high-paying marketing position at a telecommunications company at the height of Europe's financial crisis in 2010, he exhausted himself for more than a year trying to find work.

But a job proved impossible to find. He was forced to leave his sunny Athens apartment, sell his BMW convertible and move in with his elderly mother. Soon, he found himself in a place he had never dreamed he would be: in line at a soup kitchen.

Public sector employees shout slogans during a demonstration against layoffs in Athens

LOUISA GOULIAMAKI I AFP I Getty Images

"I used to be sought after," said Mr. Polychronopoulos, 49. "But there is no place for me in society anymore."

Even as signs of an economic recovery emerge in the euro zone, the human cost of the five-year downturn continues to rise. For tens of millions of Europeans, the comeback from nearly five years of economic privation and Depression-scale joblessness will not be easy. A growing number of people, in Greece and other battered euro zone economies, are caught in the trap of long-term unemployment, drained of savings and living on the economic and social edge.

Greece, of course, has been hit the hardest: Its unemployment rate stills hovers above 27 percent. But the social challenges are not its alone. In the 28-nation European Union, 25.9 million people remain jobless, out of a potential labor force of about 244 million. Data released last week showed no change in the euro zone's 11.9 percent unemployment rate in February. Spain's jobless figure was 25.6 percent, and Italy's was 13 percent, a new high.

Now, in a cascade of recent reports, the European Commission, research institutes and economists are warning that rising long-term joblessness and declining incomes are straining government safety nets and swelling the ranks of people excluded from the labor market and mainstream society.

"There is a silent crisis in which a growing number of people are being left behind," said Jens Bastian, an economist who was a member of the European Commission's task force for Greece until this year. "People who one or two years ago thought the financial crisis was something that happened only to others are themselves out of a job, or increasingly pushed to the margins."

Politicians prefer to cite the positive. When Greece's finance minister last week lauded news that the country had passed economic muster by international creditors to receive its next allotment of bailout money, he praised his fellow citizens.

"Thanks to the sacrifices of the Greek people," said Yannis Stournaras, the finance minister, "we have the luxury to be able to discuss economic growth rather than fiscal adjustment."

Greece even plans to resume selling bonds soon, possibly this week, for the first time since it became the epicenter of the European debt crisis in 2010 and required the first of two bailouts. The government announced last month that Greece had achieved a primary surplus — a surplus not counting debt payments — as a result of bailout-imposed austerity.

But many Greeks, like Mr. Polychronopoulos, who are still struggling might call it too soon to declare victory.

The governments of Ireland, Italy, Portugal and Spain are also forecasting accelerating recoveries, unleashing a wave of optimism among international investors, who have flocked to buy their debt.

But despite such signs of recovery, "growth in and of itself will not solve the human and social problems that have been rising," said Isabelle Maquet-Engsted, deputy head of social analysis at the European Commission, the administrative arm of the European Union. "We now have to deal with the fact that many people have been affected very seriously, and it will be difficult to put them back on track."

The Organization for Economic Cooperation and Development, the association of free market democracies, puts it more bluntly. It warned that the tentative recovery "risks seducing us into believing that all is now going well and that, over the next few years, a rising economy will lift all boats." The evidence, the report said, "suggests otherwise."

People without jobs who have been seeking work for more than a year account for more than half of the unemployed in Greece, Ireland and Italy.

Among them was Mr. Polychronopoulos, an energetic man who said he slumped into depression the longer he went without a job. As a consultant, he had spent a 25-year career building marketing and sales networks for several Greek companies, earning about €6,000, or $8,231, a month at the peak of his career, a salary that afforded him vacations on the Greek islands and a cozy apartment in central Athens.

But when his consulting position suddenly ended four years ago, his self-employed status made him ineligible for benefits. Money ran low, and soon he and his mother were barely able to afford living expenses, including food.

Even the millions of other unemployed people in Europe who are protected by the social safety net now receive reduced benefits. Although European Union governments raised spending on the unemployed by an average of 4 percent a year from 2009 to 2012 as the ranks of the jobless swelled, benefits as measured per person declined, according to a report last week by Bruegel, a research group in Brussels.

For many, even having a job is no insurance against penury. A European Commission survey warned of a deepening income divide as the proportion of the working poor rises in some European Union countries, especially Greece.

And when jobs are created, many are low-paid, temporary contracts — replacing permanent positions, which labor laws often require to come with expensive benefits and protections that employers are reluctant to assume. According to Eurostat, the official statistics agency, more than half of new jobs in the European Union last year were temporary positions that often did not pay a living wage.

Even for some people on permanent contracts, the situation is little better. Many employers racked by the crisis have been unable to pay their workers on time. In Greece, an estimated 800,000 to one million employees have gone unpaid for a month or longer — a problem that has also hurt a growing number of workers in Italy, Portugal and Spain, among other European Union countries.

Mr. Polychronopoulos eventually stopped waiting for a job to materialize and went to work on his own, setting up a communal kitchen he calls Free Food for All.

When he began, in 2012, he trolled produce markets and asked vendors to donate potatoes, tomatoes and other food toward a giant cooking pot he would set up in the middle of the sidewalk.

Now, with a group of volunteers, he serves about 130 rations a day — including to Greeks who, like himself, used to live well but slid into the social margins. He himself scrapes by on the donated food he receives and cooks for others.

His only rule for those who share his group's food is that people stay and break bread together rather than eating alone in shamed silence. It is an imperative he recently discussed in a talk at a TEDx conference in Kalamata, Greece, organized under the international offshoot of the nonprofit TED organization, which promotes "ideas worth sharing."

"People can fall from grace," Mr. Polychronopoulos said one weekday as he stirred a caldron in a square near the Acropolis. "They need a gesture of solidarity."

He pointed to the crowd who had gathered for a meal, including a neatly dressed teacher carrying a briefcase, whose salary had been slashed to such an extent that he and his family were on the verge of being evicted.

"The real crisis won't be over anytime soon," Mr. Polychronopoulos said. "The most important thing is for people who have been affected to maintain their dignity."