Gov’t hopes for milder post-Olympic job slump

Stalled projects, Middle East works and EU funds may help

By Christina Kopsini - Kathimerini

The Labor and Social Security Ministry is resting its hopes for stemming a rise in unemployment after the Olympic Games on the acceleration of at least some of the seven large concessionary projects that have stalled, an increase in the participation of Greek construction firms in projects in the Middle East and the disbursement of approved European Union investment subsidies under the Third Community Support Framework (CSFIII).

The stagnant state of most of the seven concessions, which are to be partly financed by the government, has led to the withdrawal of Italian and Spanish groups from the 25 consortiums that initially contested the projects.

However, initial data regarding the level of employment in the construction sector are not so dire as might have been expected. Rather, most of the pressure on the labor market originates in the farm and manufacturing sectors, particularly industry. In the 1980s and ’90s, the crisis in the latter led to the decline of industrial areas. Then, the Organization for the Restructuring of Enterprises (OAE) undertook the management of the crisis, keeping afloat a number of large bankrupt enterprises to prevent unemployment from rising.

Today, the role of transforming problematic private enterprises into healthier ones falls on banks, as indicated by their particularly hard ongoing negotiations with Naoussa Spinning Mills.

While the textile sector can be said to be in the eye of the storm, the crisis is also affecting enterprises such the Thrace meat industry, the Perama ship and repair zone and Neorion shipyards, among a large number of over-indebted enterprises.

The concessionary projects originally hoped to alleviate unemployment pressures are the Thessaloniki underwater road tunnel, the Ionian Highway in western Greece, the Corinth-Tripolis highway which branches out to Kalamata and Sparta, the extension of the Attiki Odos ring road in Athens to Vouliagmenis Avenue, the Maliakos Gulf underwater road, and the Maliakos-Trikala road. But of these seven only two, the Maliakos and Thessaloniki underwater tunnels, are likely to make progress in the near future, as the indifference exhibited by the previous government did not allow even the completion of the studies. If immediate measures are not adopted, the other five are quite likely to be written off or, at best, postponed and included in CSFIII for after 2006.

Labor Ministry officials say there is considerable potential for utilizing CSF funds to bolster employment. Optimism is based on the fact that about 18 billion euros of CSF funds has still not been absorbed.

Another source of hope is in plans to tap more business in the Arab world, which is based on expectations of a gradual exit of US capital from countries like Jordan, the United Arab Emirates, Bahrain and Saudi Arabia.

Nevertheless, employment in the construction sector has already begun to fall and the decline is expected to be completed in August. According to cross-checked estimates, the loss of jobs will vary between 5,000 and 7,000. The National Statistics Service says 132,432 workers are employed in the construction sector in Attica, of whom 47,807 are immigrants. Another recent study showed that 72.56 percent of immigrant workers in construction come from Albania and the rest from 17 other countries.

Many economic observers have warned for some time now that with the completion of Olympic and related projects, immigrants will find themselves out of a job, exerting a downward pressure on wage rates.

According to a study conducted within the framework of the European Union-sponsored program Equal, the large majority of Albanian immigrants do not rule out returning home as long as there are guarantees for transferring social security rights there. The economic situation in the neighboring country has improved and is clearly reflected in living standards. By contrast, relatively fewer Bulgarian immigrants appear willing to return home, as fiscal progress does not appear to be spilling over into quality of life.

The same report showed that 95.58 percent of economic immigrants are insured with the Social Security Foundation (IKA). This high rate is expected to be decisive as regards the plans of those immigrants who will lose their jobs after the completion of the projects; 70.03 percent replied that the recognition of social security contributions obtained in Greece in their home country will be reason enough for repatriation. In ethnic breakdown terms, a positive answer was provided by 67.82 percent of Albanian construction workers, 73.91 percent of Pakistanis, 87.5 percent of Romanians, 90.09 percent of Egyptians, but only 45.45 percent of Bulgarians.