Thursday, September 29, 2011

How much more can Greece take?

Another day, another government announcement of yet more taxes and job cuts. So far there have been five seperate initiatives in the last two weeks and yet more moves by Athens lay ahead in order for the Greek government to placate its creditors.

In such an atmosphere people have no idea what the future holds for them, planning any kind of budget as a family or business has become virtually impossible as no one knows that kind of new bills are coming their way, what their salary will have or even if they'll have a job in the coming months.

As you can imagine such insecurity has forced people to cut back on spending. Even those who have money are afraid to buy anything other than the bare essentials in case they are suddenly hit by yet another tax demand by the authorities or find themselves without work. In such an environment who in their right mind would invest, open a business or even buy a car? So people live in a kind of limbo, unable to move on with their lives and plan decision such as having children or getting married until the situation becomes more comprehensible

On the other hand the poorer off are been crushed by a vice consisting of falling wages on one side and rising prices on the other. Here in the north where winters are much cooler than one usually associates with Greece (we're just 130 km south of Bulgaria) the 50% hike in tax on heating oil combined with large increases in electricity prices are going to push many families into fuel poverty this winter.

Officially, unemployment in Thessaloniki is 21%, but studies carried out by GSEE (Greece's answer to the UK's TUC) put that figure at 5-8% higher with no prospect of any decline soon. Indeed the figures are guaranteed to go higher as tens of thousands of public sector workers are laid off and the continued fall in domestic consumption carries on apace.

Since the start of the year 17% of shops in the centre of Thessaloniki have closed down and store owners are claiming a drop in sales of 50% in the last three years.

In areas outside Thessaloniki's bustling downtown shopping district the picture is even grimmer with business organisations in the poorer western districts of the city reporting a fall in turnover of 80%.While some of this may be exaggeration many commercial thoroughfares such as the westbound Langada Street have indeed been decimated with 70-80% of shop fronts either boarded up or sporting For Sale signs.

Public confidence in the government of prime minister, Giorgos Papandeou has hit rock bottom as his party drifts to gaffe to gaffe, seemingly unable to do more than issue garbled public statements which raise more questions than they answer.

No comments: