Recession-wary Greece feels pinch at Easter
Usually busy retail season weakened by cutbacks enacted after ’10 bailout
ATHENS — Easter here is usually a profitable time of year, when shops in central Athens line their windows with brightly-colored wrappings for candles and chocolate eggs. But this year has been one of gloom, with rows of shuttered shops and “for rent’’ signs in Greece’s recession-hit capital.
There are still Easter eggs and candles for sale, offering a brief respite for Greek shoppers and merchants alike. But nearly a year after Greece was rescued from bankruptcy by a $160 billion international bailout, its businesses are reeling from stringent austerity measures imposed as a means to pull the economy out of its debt hole.
In a country where the vast majority of businesses are small- and medium-sized ones employing fewer than 50 people, enterprises have been closing at an alarming rate. Last year saw 65,000 small- and medium-sized enterprises shutter, said Vassilis Korkidis, president of the National Confederation of Hellenic Commerce.
Christina Karyda, 45, fears her gift shop might soon join them.
“There is no future. There is no present, how can there be a future?’’ she says, gift-wrapping a decorated candle used for the all-important midnight liturgy before Easter Sunday. “We’re already in the red. We’re just going to be increasing the amount of our debt.’’
Karyda has run her shop in the residential neighborhood of Kypseli since 1988. But with austerity biting, the appetite for trinkets and decorative toys is falling fast as customers concentrate on spending for more essential items. She is giving it until the end of the year, she said. “And then, it’s over. I’ll do another job.’’
The austerity package was essential to overhaul the economy after years of overspending and overborrowing. But the flip side has been to slash Greeks’ disposable income, which in turn has contributed to the recession.
For retailers across the country — from butchers to bakers, chocolate shops and candle-makers to shoe shops — Easter, the most important holiday in the Greek Orthodox calendar, is usually a good time of year. There are gifts to be bought for godchildren, meals of roasted lamb to be prepared for Easter Sunday, friends and family to treat.
The government issued data this week showing that the traditional Easter meal — featuring the all-important lamb or kid goat — would cost 4.43 percent less than last year. Promising news, but many shop owners say people are not spending as much as they usually do during the holidays.
“Consumption has fallen significantly because although people are in the mood to buy, they don’t have money,’’ said Themis Matsoukas, who owns a series of shops specializing in nuts, chocolates, and traditional sweets just off the city’s main Syntagma Square. “Their wallets can cope with only the bare necessities.’’
The public sector is Greece’s largest employer, so measures that included public sector wage cuts have had a ripple effect on consumer spending. Businesses in central Athens have also been severely hurt by repeated road closures for frequent demonstrations — and unions have called for yet another general strike on May 11.
Some fear the prospects for the rest of the year look bleak.
“For 2011, we are afraid that more enterprises are going to stop their activities since there is no consumption,’’ said Korkidis, the head of the commerce confederation. “Consumption is in a state of freefall right now.’’
Data from the first three months of the year show a drop of between 25 percent and 30 percent in consumption, on top of a 25 percent drop in 2010, Korkidis noted.
Many small and medium-sized businesses “have no reason to exist, actually they have no customers any more,’’ he said, noting that many were struggling to pay increased taxes and social security contributions for their employees.
Korkidis estimated things would get worse before they get better.
“I don’t think we have reached the bottom of the barrel yet,’’ he said. “I think 2011 is going to be the most difficult year for all of us.’’