Austerity measures implemeted in Greece as part of its long haul towards redemption have caused social and economic upheaval in the country. Regardless of the cause of the crisis, here are the results of the belt-tightening since 2009 in a vicious cycle of bitterness and disillusion for Greeks:
1. Business closures & Bankruptcies
One after another, businesses are closing as they are unable to bear the brunt of capital controls, tax hikes and other burdens of the economic crisis. There’s a domino effect of collapses as one business folds after another — Ledra, Marinopoulos, Jet Oil and so forth. The General Registry of Commerce figures point to the closure of 16,944 businesses in the first six months of 2016, added to the 24,846 that closed shop in 2015. But its not all doom and gloom says Greece’s Ministry of Economy, Development and Tourism as it is believed that a number of these closures were inactive businesses finally getting round to doing the paperwork.
2. Loss of Public Revenue
Overtaxed Greek citizens and businesses are unable to meet their obligations. Data released by the General Secretariat of Public Revenue showed that there were 1.25 billion euros worth of unpaid taxes in Greece in May. Overdue debt is set to explode to 88.88 billion euros, making up for half of the country’s GDP — up from 30 billion euros at the end of 2009. While the Tax Department is clamping down with fines for even those who owe 500 euros to the tax department, most of the large debt will never be paid back. Recently the names of 13,730 big government debtors was released on the internet, however, most of the names on the list belonged to companies that had either been sold off, closed down or had their debts wiped off. e.g. Olympic Airlines (1.3 bln euros worth of debt), Acropolis Securities (8 billion euros), supermarket chain Atlantic (654,000 euros) and a long list of others no longer exist to pay back debts owed.
The International Monetary Fund’s study shows that Greece is the eurozone champion of non-performing loans with these at 100 billion euros from a total of 100 billion euros of unpaid loans in the Eurozone, whereas the Bank of Greece on Wednesday released figures that state that size of NPLs will not improve in the near future.
Eurostat figures showed that seasonally-adjusted unemployment figures for May 2016 were the lowest recorded in the euro area at 10.1 percent. The case, however, was still gloomy for Greece that had the highest unemployment rate at 24.1 percent in March 2016. Greece is also the country with the highest rate of youth unemployment at 51.4 percent.
4. Salary Slashes
The Greek Manpower Employment Organization (OAED) released figures that show that thousands of Greeks were earning salaries that are less than 1-year unemployment benefits in Greece at 360 euros per month. The shocking report showed that 126,956 employees were earning gross payments of less than 100 euros per month. Topping that were 343,760 workers who were earning from 100-400 euros per month. The Greek state social security organization IKA reports that 432,033 workers were receiving gross wages of up to 510 euros per month. Salary earnings are a sensitive issue in Greece where even businesses that aren’t facing financial problems are taking advantage of the situation by offering low rates, slashing existing wages, not paying employees on time and demanding unpaid overtime.
5. Brain Drain
Endeavour Greece — a Greek branch of an international non-profit entrepreneurship support organization — estimates that the Greek brain drain that has seen the emigration of 350,000 people since January 2008 has cost the Greek economy more than 50 billion euros as scientists and professionals have left to seek work abroad since the onset of the economic crisis. Most of these individuals were degree holders and now contribute 12.9 billion euros per annum to their host countries.
First published in the Greek Reporter on July 26.