After decades of labor underperformance and high unemployment, the European south, led by Greece, is enjoying an impressive recovery in the labor market, in contrast to the slowing north, says Dutch bank ING.

A new page is being written in the economic history of the eurozone. From 2023 onwards, the European south, and especially Greece, is making remarkable progress in the labour market, with unemployment falling dramatically and employment strengthening in the private and public sectors. This development is not only about the post-pandemic recovery, but seems to be a structural shift that reinforces north-south convergence, with decisive implications for economic policy and ECB decisions.

From the beginning of 2023, the South of the Eurozone, and Greece in particular, have recorded a significant decline in unemployment. According to ING data, countries in the European South have seen unemployment fall by between -0.8 and -2.6 percentage points, while in contrast, countries in the North, such as Belgium and Germany, have seen increases in unemployment.

For Greece, this positive development is also reflected in the strengthening of employment in the private sector, particularly in the retail trade, professional and scientific services, and construction sectors. It is noteworthy that there was no negative employment growth in any sector of the Italian economy, while the picture is similar in Spain, with only small losses in the agricultural and financial sectors.