Greece’s Eurozone partners agreed this week to provide the debt-ridden country with 130 billion Euros in new loans. It is the biggest sovereign bailout the world has seen but there has been little celebrating in Athens.
The dire state of the economy, the tough austerity measures and the fact that Greece’s public debt will remain worryingly high for years to come means that crisis-weary Greeks are focusing on one thing and one alone: surviving.
The working mother
“I am convinced the latest deal won’t change anything,” says Liana Kalkavoura, a beautician and mother of two in Athens. “Our family is fully stretched as it is and they are going to try and squeeze more out of us. I’ve had enough.”
Kalkavoura’s young son is part of a children’s choir. Taking him to singing lessons is the only activity her family has not cut out of their lives over the last two years.
As a result of wage cuts and tax hikes, Greeks have seen their disposable income fall by almost a quarter since the crisis began in 2009. Families across the country have made big adjustments to their budgets but this is having a negative impact on demand. The economy, which shrank by almost 7 per cent last year, is seemingly locked in what some economists have called a “death spiral.” About 60,000 small businesses are forecast to close this year, leading to 240,000 people losing their jobs.
Kalkavoura switched jobs late last year as her employer was running into financial trouble. Her new boss hasn’t paid her yet this year because of the same problems.
“I’m furious with our politicians,” she says. “We need to get rid of all of them. They are destroying our lives.”
The unemployed print operator
Cuts to public services, civil servant’s salaries and state pensions have helped Greece achieve one of the biggest primary budget deficit reductions Europe has ever seen. But while the deficit has been coming down, unemployment has been skyrocketing. It reached almost 21 percent.
“I’ve been looking for a steady job for almost two years but even the part-time ones are drying up now,” says Dimitris Pantazis, a print operator.
It all seemed to be going well for Pantazis in 2009 when he joined a large firm based just outside Athens. Then, Greece’s debt crisis struck. In less than 10 months, the 46-year-old had lost his well-paid job. Since then, he has applied for all kinds of vacancies, including for grillmen and delivery drivers but has found only part-time work. To make matters worse, the government recently approved a 22 percent reduction in the minimum wage, which will fall to 586 euros gross. Like many of his countrymen, Pantazis is now looking for opportunities abroad.
“I don’t want to leave but I don’t see anyone addressing the main problems,” he says. “Maybe Greeks will become more disciplined and the new bailout will work. But I haven’t got that long. There needs to be growth. There needs to be investment. I need to work.”
As long as Greece teeters on the edge of a default that could cause it to abandon the euro and return to the drachma, investment will be very hard to come by. The country’s debt dynamics are another worrying factor for those sizing up opportunities in Greece. If the bailout works, Greece’s debt could come down from more than 160 percent of GDP to about 120 per cent by 2020. That would still make it the highest in the euro area.
“We’re reliant on outside help,” says retiree Kostas Kollimenos. “If the Europeans get fed up with our politicians and the slow pace of reforms, they’ll cut us loose. I dread to think what will happen then.”
Like many Greeks of his generation, Kollimenos left his village as a child to find work in Athens. He now has to contend with repeated cuts to his pension of about 1,000 Euros, which he thought was guaranteed after so many years of hard work.
The 72-year-old lives about 40 kilometers outside Greece’s capital and has turned to nature to help provide for him and his family. He has planted lettuce, carrots and potatoes on his land and has more than a dozen chickens to lay eggs.
“This is how I grew up,” says the pensioner. “Back then we didn’t have anything. I never expected we would return to this way of life but it’s a question of survival. Greeks have always known how to survive.”