Suffering under dire economic woes, Greeks unable to even afford clothing!

The crisis of sovereign debt in Greece is getting out of control...people lately cannot even afford to buy summer clothing, literally losing the shirt off their back.
Here is a scene of misery from the Macedonian beach resort of Asprovalta, between Serres and Thessalonike:

And more proof of Greek suffering:

from: TaXALIA tis Thessalonikis
http://taxalia.blogspot.com/2011/07/blog-post_09.html
And more of the same from a beach in Katerini, in Pieria:

No one smiles anymore

Fear, hope, and facing the unknown. During a tumultuous week for Greece, Neos Kosmos talks to Greek Australians across the Hellenic Republic

Wednesday 29 June, 9.00 am, Syntagma Square

6 Jul 2011

Mike Sweet

Tuesday 28 June:
Greece has ground to a halt; most flights in and out of Athens' Eleftherios Venizelos airport have been cancelled; ferries are at their moorings in Pireaus - the lifelines to the islands cut.
From the Ionian to Alexandroupoli; from Thessaloniki to Kythera and Kastelorizo - the Hellenic Republic is closed for business.
Meanwhile, the Greek Parliament begins its debate on the swathe of new austerity measures that must become law, if Greece is to receive further vital bailout funds. Those not on strike go about their business as best they can. As they did, Neos Kosmos spoke to Australians of Greek descent who live and work in Greece whose lives and livelihoods depend upon how the current crisis unfolds.
Rosalyn Geranikolas from Perth has been in Greece for 32 years. The owner of four hotels in Rhodes and Kastelorizo, Geranikolas says visitor numbers remain unaffected by the crisis and that visitor numbers have been on the increase as the season begins.
"The economic situation has affected us in the sense that there's no credit available anymore - you have to pay 50 per cent when you order and the balance before you receive the goods. If another government comes in, I really think there's not much else they could do; we're in too far. It's up to the people to pull their socks up."
Would you consider leaving Greece? "No, definitely not; a soldier never leaves his place of battle! I believe the Greek people have realised it's up to us now. The austerity measures are hard, but it's something we all have to do. The worse thing we could do is pack up and leave."
Barbara Samantouros, originally from Brisbane, is the finance manager of AGREK, an agricultural products company in Chalkida.
"People are very pessimistic at the moment; they feel they can't take on this extra burden and I think the government could have found other ways spread out the pain," says Samantouros, who has lived in Greece for 25 years.
"They could have done more to repatriate funds that have gone out of the country. Something's got to be implemented, but everything's being done at the last moment. It hasn't been well thought-out."
As for her own company's prospects and the agricultural industry as a whole, she's more upbeat.
"People are looking at the agri sector in a very optimistic light. The future for Greece depends on tourism, shipping and agriculture."
Have you considered leaving because of the uncertainty? "I've thought about it," but it's not to our advantage at the moment; we're trying to do our bit for Greece. We believe there's a future here."
Con Kehagias has run his graphic design company in Thessaloniki for 15 years. Originally from Coburg, Victoria, Kehagias left for Greece as a 13 year-old.
"I don't agree with what the government are doing. The politicians don't care about the people; they're putting so much pressure on, and the people are going to suffocate. The EU and IMF are economic assassins; they're not helping Greece at all."
Kehagias' radical interpretation of the issues; the motivations of the various forces at work in the Greek crisis are worryingly common, though, like many who have strong opinions, he supports anti-government protests but admits job cuts, such as those that will affect Greece's public service, are overdue.
"That has to happen," says the designer, who is now seriously exploring the idea of migrating back to Australia. "I'm married and have a little boy who is four years-old. Here the education system is awful. I see how I grew up in Australia and I make the comparison. I want to come back. Here wages are going to go down; people won't have what's necessary for living.
Members of the Greek Parliament run the gauntlet of protestors wishing to obstruct the ongoing debate before the fateful first vote to endorse the government's new 28 billion euro austerity plan. As the day goes on, clashes between the riot police defending the parliament and masked stone-throwing activists grow ever more violent.
Sotiris Stregas, a sales rep for a dental products company has lived in Athens since 1990.
"It's a 'Catch 22' situation; we don't want these things imposed on us, but if things aren't imposed, then we'll never ever see a brighter day. People don't know what is going to happen tomorrow," says Melbourne-born Stregas, who is married and has two teenage daughters.
Though accepting of the need for an imposed solution, the urbane salesman, who was brought up in Sydney, doesn't believe that the medicine Papandreou is prescribing is the answer.
"I don't believe they should be increasing taxes; I think that's counter-productive. Businesses are closing, so the pool from which you can get tax is decreasing."
Stregas will stay in Greece largely because of his wife's wishes not to migrate. He believes elections are just around the corner and that going to the polls will offer new possibilities to resolve the deteriorating situation.
"This government is faltering. I believe the politicians from the main political parties cannot give us a solution. Whatever new government is formed cannot have any connection with governments over the last 20 years. I don't want the same people to govern us again. The politicians who brought us here cannot give us a solution. I would prefer foreigners - Germans, Australians, or Greeks from overseas to come in and help out. It would probably be our best chance."
Diana Athanasiou is an English language teacher in Epirus who has been in Greece since 1988. "I don't think Papandreou has a choice; he's like a puppet. Greece isn't governed internally, it's governed externally.
Athanasiou shares the widely-held view that all Greece's problems have come from corruption and cronyism at the highest levels of government, and believes the old party system will never deliver an effective solution. "It's as if the Greeks were asleep. It is changing. They've finally woken up and they are asking for the truth. Ministers are going unpunished. The people are furious that we have a debt that we didn't create."
Perhaps the most worrying statement this Melbourne-born schoolteacher has to share, is the effect on the young people she teaches. "Students don't see the point in studying," says Athanasiou, whose pupils range from Grade 2 through to graduates. Living in the rural town of Paramithia she feels a sense of protection from the situation.
"I haven't really felt the crisis as yet, but if Greece goes bankrupt, then I'm not going to have any students because Greeks will not be able to afford any private education."
Efstathios Paraskevopoulos is manager for South East Europe for a British on-demand video distribution company. Born in Adelaide, Stathis has been living and working in Greece on and off since 1969.
Does he feel there's an alternative to the path being proposed by Papandreou? "There is not much we can do but let us be clear; Papandreou is not proposing any path; the Troika is proposing the path, and we are simply doing what they tell us.
"Is the Greek government capable of getting its books balanced? Not when you are running an 'inherently' corrupt system." Stathis says he's nervous. "We all are, because all is hanging on a thread. We are inherently an irresponsible nation - it is much easier to blame someone else and not take responsibility. We have always blamed someone else. Conspiracies, after all, are exciting."
Is he tempted to leave? "The thought has passed my mind. If the country goes bankrupt it will obviously have a domino effect everywhere so I would think of getting out of Europe."
Nick Geronimos is the Perth-born business entrepreneur who created Athens Backpackers and Studios, the popular Aussie-inspired tourist accommodation centre at the foot of the Acropolis. Geronimos pulls no punches in his analysis of the crisis.
"The reason why this country is in such a mess is because of the bloated public-sector. How can a country with a population of 10 million people, with four-five million employed, justify a public sector of over one million? It is nonsense; a residual of the Ottoman empire. These people have got jobs because they sold their votes to the political parties. And now they don't want to lose their privileged position of copping a pension for life at full pay, when they retire at the age of 45. It's a sad and sorry state to see the public servants and the 'no-hopers' in Syntagma Square. Blaming someone else for your own shortcomings is a traditional trait of the modern Greek.
"If you asked those public servants where there office was, they wouldn't be able to tell you, because their pay goes into their bank account and they never go to work. Sort this out and you'll sort out 50 per cent of the problem."
Geronimos says the austerity measures have had little or no effect on his business, but that the regular strike actions have a hugely negative effect. The 48-hour strike this week will cost him 20,000 euros in cancelled reservations with tourists nervous about traveling to and within Greece. "I'm 100 per cent behind Papandreou. I think he's done a great job to date. I feel for the people who will lose their jobs, but in Australia we went through this in the 1970s and 1980s. Mitsotakis said 30 years ago that we should pay this debt off, and they laughed at him and threw him out of power. Well… 'hello!!! "
Would Geronimos consider coming back to Australia? "No," he says defiantly, "we're committed to doing business in this country; and being a good corporate citizen."
The Greek Parliament passes the vote to raise taxes to secure 14.09 billion euros over the next five years and to make 14.32 billion euros worth of cuts in public spending. The vote is passed by 155 votes to 138. As news of the vote reaches protestors in Syntagma, fighting between the police and protestors intensifies; a post office in the same building as the Finance Ministry is set alight.
Greece's path to recovery is once again shrouded in a pall of tear gas, bringing water to the eyes of protestors and onlookers alike; tears shed for a country torn and in pain.
http://neoskosmos.com/news/en/no-one-smiles-anymore

How Europe’s New Goals Will Pay Off (a closer look at the Greek reforms)

Call it Greece’s China moment. Like an economy run into the ground by decades of socialism, as China’s was before the country began reforms in 1978, Greece’s political and economic order had failed. Greece wasn’t crushed by Maoism but by its $400 billion national debt. When the market for Greek bonds dramatically collapsed in the spring of 2010, the country’s prime minister, George Papandreou, managed to secure a $140 billion credit line from the European Union and the International Monetary Fund—under the strict condition that he slash public spending, raise taxes, and reform the Greek economy.

Much of the world—probably including most Greeks themselves—snickered at the idea that this most profligate and corrupt of Western nations could ever change its ways. Yet that is exactly what Papandreou has set out to do. He has faced down strikes and protests to start abolishing the tight controls on many sectors of the Greek economy, unleashing competition for the very first time. Ranked on the World Economic Forum’s Competitiveness Index as one of the most inhospitable places to do business in the Western world, Greece now has a fast-track law to push through investment projects, and is setting up one-stop offices for starting a business. An education reform modeled after that of Sweden, where Papandreou once lived, will cede central control over universities and force them to compete for students. A radical new transparency law—aimed at rooting out corruption and the Soviet-style statistical fakery that obscured the true extent of the country’s debt—could soon make Greece’s the most open government in Europe. Once the Diavgeia (“clarity”) law is fully in force in 2011, no government contract, expenditure, or administrative decision will be legally binding unless it has been made public on the Web.

If Greece stands for one of the darkest days of the world’s debt crisis, it also stands for its silver lining. One after another, the overindebted countries of Europe have been forced by the crisis to address problems their leaders ignored in rosier times. Deep reforms and deficit cuts have become unavoidable in order for countries such as Greece, Spain, Britain, and Ireland to reduce their debts and regain the trust of markets. While in the United States politicians and economists still argue over whether austerity or spending is the best path to economic health, a growing number of European countries not only have embraced deficit cutting, but they are also looking for ways to boost long-term growth—so crucial for creating sustainable jobs, for financing government, and for paying off debt. Some of these reforms, like Greece’s new transparency laws, are revolutionary and could redefine the way government operates. Others are straight out of the market--liberalization textbook, contradicting the widespread view in the West that the crisis would lead to a rejection of the market economy and usher in a new era of big government. Instead, governments are finding that without growth they cannot finance their debt, and without expanding markets they cannot achieve growth.
From the view of the year 2020, says Centre for European Reform director Charles Grant, this crisis—more than all the countless agendas drawn up by Brussels bureaucrats—may well have been the turning point that restored competitiveness and unleashed new economic dynamism in many parts of Europe. Overindebted and overspending governments (state spending averages 51 percent of GDP in the European Union versus 40 percent in the United States) will have no choice but to downsize permanently, vacating many niches of the economy that can be taken up by innovative, job--creating entrepreneurs. Budget rigor will force them to become more efficient, finding better and cheaper ways to provide services to their citizens.

Until then, however, the push to restore growth is a race that Greece—and Europe—could very easily lose. Without a sustained economic recovery, public finances will remain in crisis. Slashing public spending when the economy is already weak often pushes a country into recession. That, in turn, depresses incomes and tax receipts, making it ever harder to service the debt. To avoid this debt trap, the question for Papandreou and other leaders is therefore whether pro-growth reforms can kick in fast enough or are overwhelmed by the slowdown that comes from cutbacks in spending. Greece, whose debt is still rising and whose GDP was contracting by 4 percent in 2010, could yet fall into such a debt trap and be forced to default, as it did five times between 1826 and 1932 (though both Papandreou and his IMF watchers insist Greece is on track to make all its payments). Ireland, Spain, and Portugal are also struggling to boost growth quickly enough to avoid the trap.

Making it worse—some economists say intractable—is that they have to do this at a time when there are few locomotives elsewhere to pull them out of their slump. Many of their main trading partners in Europe aren’t growing, either—or, in the case of Germany, are growing only their exports, which doesn’t help others grow their economies. "The problems are without precedent," says CER’s Grant, who predicts five years of "ghastly mess" for Europe, fraught with further political and financial tensions over debt, before the continent’s economic renaissance emerges.

Today, the budget cutters and reformers include countries from every corner of the continent, every twist of the European social model. They include Mediterranean countries long considered irredeemably spendthrift. Italy, which has the highest debt as a proportion of GDP (120 percent) of any large economy after Japan, cut its budget by $30 billion in 2009—a small number but a giant first step for a debt-addicted country. Spain, struggling with an uncompetitive economy, a real-estate crash, and 20 percent unemployment, is deregulating its labor market to create new incentives for companies to hire workers. Britain and Ireland have slashed state spending, while Germany has passed a constitutional amendment—called Schuldenbremse, or debt brake—that outlaws deficits in the national budget beginning in 2016. Even in France the realization is slowly sinking in that the country’s current welfare state, which produces the youngest pensioners in the OECD countries, is an increasingly unaffordable and unfair burden on the productive economy that sustains it. When President Nicolas Sarkozy took the first small step of raising the minimum pension age from 60 to 62 in October, it was one of the first times a French government has not pulled back (or watered down) a necessary reform in the face of public protest. "Real reform starts when the government money stops," says Valdis Dombrovskis, the 39-year-old prime minister of Latvia, another hard-hit country.

That the deepest reforms of all are taking place in Greece is only apt for that singularly dysfunctional country. But it’s also proof of what even the most unreformable nation can do. The country is downsizing the number of politicians and civil servants with an administrative reform that slashes the number of municipal governments from 1,034 to 325, and of regional prefectures from 67 to 13. Collective bargaining has been de facto abolished, and companies are now free to set their own wages, which will help Greek companies become flexible and competitive. The massively loss-making state railway company, whose debt alone adds up to 5 percent of Greek GDP, will be overhauled.

Key sectors of the Greek economy, such as transport, tourism, and agriculture, are becoming more open to foreign investment. China is investing $7 billion in Greece’s main port of Piraeus, slated to become Asia’s new hub for all of Southeast Europe. Qatari investors have lined up for real-estate deals that used to be blocked by the bureaucracy. When all the reforms eventually kick in, Greece’s GDP could benefit by as much as 17 percent, estimates Yannis Stournaras, director of the Foundation for Economic and Industrial Research in Athens. Deregulating trucking companies alone, says Stournaras, will generate one extra point of GDP by cutting transport costs, decreasing shipping times, and creating new jobs in the sector. If Stournaras is right, a new growth story is about to emerge from the Hellenic rubble.

For a similar growth dynamic to be unleashed elsewhere in Europe, however, the current reforms can only be a start. So far, politicians have focused more on the rigors of budget cutting than on the economic reforms needed to create growth, says Ann Mettler, director of the Lisbon Council, an economics think tank in Brussels. Although the EU Commission is trying to pursue Europe’s lowest-hanging fruit—the opening up of its vast, 500-million—consumer economy by creating a truly single EU-wide market—that idea is not getting much support these days from the protectionists in the ministries of Paris and Berlin. Digital services, from broadband to Internet shopping, are hopelessly fragmented along national lines, as are energy, transport, and almost the entire service economy, where productivity gains and job growth have lagged far behind comparable economies like the U.S.’s. Nor has Europe acknowledged that the more competitive economies, such as Germany’s, are part of the problem facing Greece, Spain, and the other countries that depend on growth to get out of debt. Although Germany’s dynamic export companies are among the world’s most competitive, its limpid and overregulated domestic economy has been stagnant, starved of investment, and acting as a drag on the rest of Europe’s growth.

In the past, crises have created opportunities for countries and societies to reinvent themselves, just as now—booming China and India did after decades of stifling socialism and bitter poverty. Europe’s recent history suggests that its leaders begin to push for reforms only when their backs are against the wall. Papandreou says his country’s debt crisis, for all its very real pain, has made it possible to drive through changes that would not be politically possible in normal times. Europe may be still only in the middle of its debt crisis. But in struggling economies such as Greece’s, the seeds of a revival are being sown.

http://www.bolaris.gr/index.php?page=description&article_id=2879

Άρθρο στο Φαϊνάνσιαλ Τάϊμς - Greece urged to tax the rich

By Kerin Hope in Athens 

December 7 2010

Greece urged to tax the rich

Dominique Strauss-Kahn, managing director of the International Monetary Fund, has urged Greece to accelerate its restructuring effort, saying “this is a defining moment” for the country.

“The next stage of structural reform is even more crucial to unlock the true potential of the Greek economy,” Mr Strauss-Kahn said on Tuesday at the end of his first visit since the country agreed a Euro110bn bail-out with the the European Union and the fund last May.

“This is not an easy task . . . the progress made so far, however, offers a sound platform on which to build,” he added.

The governing Socialists face strong political opposition to the current round of structural reforms: cost-cutting at public sector corporations, measures to make the labour market more flexible and an overhaul of the he tax administration.

Mr Strauss-Kahn stressed the need to boost tax collection saying the “richest should participate” – a reference to Greece’s longstanding problem of tax evasion by wealthy professionals.

His message struck home, even among leftwing Greeks holding an anti-IMF protest outside parliament, where Mr Strauss-Kahn fielded questions from members of the house economics committee.

“The wealthy aren’t being made to pay up in this crisis in spite of all the government’s talk about justice,” said Antonis Adamopoulos, a student who was standing by a banner that read “Peoples of Europe, rise up”.

More protests are set for Thursday when Olli Rehn, EU budget commissioner, is due to visit Athens on a similar mission to reinvigorate commitment to the reform programme.

The conservative New Democracy party has backed some legislative reforms but opposes the whole programme, saying it “stifles economic growth”.

The Communist party and Syriza, a radical leftwing party, which are both demanding the immediate reversal of austerity measures, said they would boycott the parliamentary committee session with Mr Strauss-Kahn. The two parties organised separate protests on Tuesday, a day after about 40 youths were arrested in violent clashes with riot police marking the death in 2008 of a teenager shot by a police officer.

Η συνέχεια του άρθρου εδώ:

http://www.ft.com/cms/s/0/efbdbfc6-022e-11e0-aa40-00144feabdc0.html#axzz17aEF0bpV