…and soon they will not be able to pay even for their daily food. According to a survey conducted by the Institute of Small Enterprises (IME/GSEVEE), six out of ten Greek households have difficulties in paying monthly utility bills (electricity, water), taxes and repay bank loans. The survey was conducted among 601 households residing in the prefecture of Attica, that is Athens and broader area, in the third and fourth week of December 2011. Aim of the survey was to find out the impact of the economic crisis in the income and expenditures of households.
Among the survey findings are:
13.5% of the Greek households are unable to cover basic needs (food, utilities like electricity, water, bank loans).
64.2% of the households cut in expenditures in order to be able cover basic needs.
90% of the households reject Value Added Tax hikes in basic goods (from 13% to possible 18-19%) even if it would mean that the current 23% VAT would be lowered.
74.9% of the household expect further income cuts in 2012.
76% of households with an income of €1,000 per month have cut expenditures for food items, while 91.1% have stopped buying shoes and clothing.
More than half of the households (51.9%) that are unable to cover basic needs sought the aid of friends and relatives and just 3.7% sought a bank loan. (see the full survey here)
However a weird thing has happened since the crisis started: While salaries and pensions were cut at a level of approximately of 40%, the prices for basic food items have increased. Bread went up 4%, meat 2%, milk and diary products 4%, fish 6.5%. Mppne should wonder why Greeks will soon stop …eating!
That’s called Stagflation and is very, very nasty! Here a wiki-link: http://en.wikipedia.org/wiki/Stagflation And Milton Friedman was the guy who predicted it to exist and he was right in this.
I have lived through a stagnation before and it is no fun, I assure you. But this is exactly why Samaras is also so terribly wrong with his calls for stimulation. Because, as I understand it, when you stimulate the economy this way this will increase the problems, because it will stimulate inflation even more. Deflational measures on the other hand will increase unemployment.
There are to things that has be done at the same time: you have create trust in your economy and you need to lower taxes. Samaras is calling for the last one, but refuses to announce plans for real reforms in the disfunctional Greek state. And that keeps the mistrust.
On the other hand does it also explain why the PASOK tendency to put everything on the card of tax-increases is so wrong.
And no, I am not calling for measure that Friedman called for either. Because those measures, like in Chili under dictator Pinochet, did not work either.
The Netherlands was in this in the 80s. They got out of it by creating trust through stringent cooperation between unions, employers and government and by carefully cutting expenditure, making the civil service smaller, keeping people at work in business by working shorter hours with lower pay and cutting taxes where they were most effective.
And this really is the only way to get out of our Greek mess…
maybe the Dutch had a more thoroughly thought programme. The Greek do not. One part of the government decides so, the other part decides otherwise and cancels own decisions. Trust in economy and confidence? We Greeks do not even trust them, nad how could we, if they change the laws every month.
The story is even better. The government started out with severe austerity that mad things worse:unemployment rose dramatic, tax-income dropped and the crisis became deeper and deeper Then the Unions and Employers decided they had enough. In secret they came together in Wassenaar (Dutch will know how ironic this is since it is the Kifissia of Holland!). There they worked out the deal. Employers would not fire employees. Employees would work shorter and get less hours paid. Even the civil servants unions participated. The government should cut their own expenses and should made it possible to get some tax-brakes for working shorter and keep people employed. Then with this they went to the government and said: take it or leave it. The government took it and told the politicians to take it or leave it. They took it and within a couple of years The Netherlands was booming.
Yes there were enough individuals who had a really rough time and choices were made that were not very social and could have been made different. That’s politics. But the main direction stayed and they kept going in this direction until they beat the stagflation.
But you are right: Greece does not have ‘leaders’ who think like that. They all think in Red Lines. Period. Well, I make them this prediction: all these Red Lines are leading to one point. And that’s total destruction of the Greek people. At this moment I am almost sure about that. And it is making me mad like hell.
it makes me mad too. Thanks a lot for the report. Maybe you should e-mail it to GSEE and ADEDY.
Suicidal pensioner is “unfortunately” not a 25 year old Tunisian:
Left Greek kids make it to British Brainwash Corps:
do have all suicides have economic-crisis motives? It is not clear
Think GSEE and ADEDY don’t know this already? Might be they don’t. But will they be interested? I have the suspicion they rather see themselves as latter day Scargills and Heffers. Way nicer to go under in a heroic class struggle then to make deals that would make sense. It seems so satisfying to talk about ‘kokkino grammy’ and look grim in the camera.
Maybe there is one incentive they might like and understand all to well: the leader of the biggest umbrella union (public & private sector workers) 7 years later became Finance Minister and in 1994 Prime Minister until 2002.
More in general, it seems nobody is interested in anything that happens or happened outside their own little island called Greece.
Taxi business ‘liberalization’? Just look abroad and see what the pitfalls are. But no, the damn bill has all the problems written in it that have already solutions abroad. But we like to make the same mistakes ourselves first and then panic.
How are other countries dealing with fuel smuggling and fraud? No, we rather install some great software system with a nice Greek name and are surprised that after one year nothing has changed. And these are just two examples…
you are right, Antonis, they name the meat ‘fish’ and keep on eating. The incentive is not bad at all. What’s the guy’s name? there is need for a separate post, I think.
Wim Kok is the name of the union leader becoming leader of the Labour Party and then prime minister. http://en.wikipedia.org/wiki/Wim_Kok A short piece about the agreement you can find here: http://www.cbs.nl/en-GB/menu/themas/macro-economie/publicaties/artikelen/archief/2007/2007-2321-wm.htm
huuuups! I know him 🙂
In the sense of “seen him on telly”, or belonging to your pareia? In that case I like to state that I really, really like the guy and he is so great!!! 😳
And if it’s the first “knowing” I will let you know what I really think of him. 😆
No, Wim is not part of my parea but I used to know him from the news. What happened to him at the end?
Ah, glad to hear that! Because I have to tell you, Wim is poor, lonely and is longing for at least one piece of bread a day, living as he is on his meagre old age pension that is cut back all the time in Dutch austerity drives.
Who could live from the income he gets at 73 from a couple of his current functions:
President of the Board of Governors of The Netherlands Cancer Institute
Member of the Supervisory Board of ING Group (international financial services)
Member of the Supervisory Board of Royal Dutch Shell (oil company)
Member of the Supervisory Board of TNT (international postal company with Dutch origin)
Member of the Supervisory Board of KLM (airline)
Member of the Strategic Advisory Panel of the European Business Awards
Member of the Club of Madrid
Special member of Supervisory Board of Stork (industrial group)
Commissioner of the International Commission on Missing Persons (ICMP).
I guess even more incentives for GSEE and ADEDY chairpersons to follow his example? 😛
why did he leave PM office?
Officially because of 8000 death in the biggest massacre in Europe after WWII. “Kok’s cabinet fell just weeks before the May 2002 elections when Kok and all his ministers stepped down because of the discussion about the possible Dutch responsibility in the Srebrenica massacre.”
He then left politics in the formal sense.
I said “officially”. People were getting very tired of him and what he was standing for. But that’s a long story. Although it has partly to do with where we are now in the world.
About two week after he resigned a very popular and populist new politician was shot and he died just a couple of days before the General Elections that this man might have won. Kok was caretaker PM and boy, must he have been glad that he could get out of the madhouse Holland became around that time! 😉
thank you for the information. Srebrenica could bring down a EU politician? Here they wouldn’t go no matter what.