Remember Greece? The country’s economic crisis has largely been out of the headlines since late 2015, when leaders there agreed to a new bailout deal that kept it in the eurozone. Back then, it was obvious that Greece’s immediate prospects were bleak—the austerity measures its creditors insisted on in return for a new batch of loans all but guaranteed years more of depression and high unemployment. But how long could the misery last?
One especially soul-crushing prediction comes to us from the International Monetary Fund, which is out with a report analyzing whether Europe’s plans for making Athens repay its debts are sustainable over the long term. Its answer, in brief, is no. On the country’s current path, the IMF thinks Greece would have to spend more money financing its old debt than any country could realistically manage. (Specifically, it projects that budget deficits and debt financing will consume almost 60 percent of the country’s gross domestic product by 2040, which, Jesus.) And the job market?
Greece will continue to struggle with high unemployment rates for decades to come. Its current unemployment rate is around 25 percent, the highest in the OECD, and, after seven years of recession, its structural component is estimated at around 20 percent. Consequently, it will take significant time for unemployment to come down. Staff expects it to reach 18 percent by 2022, 12 percent by 2040, and 6 percent only by 2060.
This is one of the saddest passages I’ve ever read about a developed nation. You could maybe debate the idea that Greece’s unemployment is “structural”—which typically means a mismatch between the skills of the workforce and the types of jobs available—and how that affects things, but 40-year high joblessness sounds a whole lot like an economic death sentence. “For Greece’s young people currently out of work, that is all of their working life,” economist Frances Coppola writes at Forbes (bolds hers). “A whole generation will have been consigned to the scrapheap.”
I somehow doubt that frustrated Greek voters—who’ve already started electing neo-Nazis to Parliament—are going to passively accept that fate. At some point, another political standoff with Europe is coming. Or maybe something much darker.