As financial crisis drags on, Greeks see a bleak future
ATHENS -- The walls and floors are spotless and all the tools are in their places. It has the feel of an operating room rather than a car repair shop, except for the noise from birds in their cages and the news on TV. Inside, a sign hangs: "All work must be paid for in full upon completion."
"I bought this a few years ago," said owner Giorgos Katsikadakos, 56. "I just wanted to help the old man selling them. Back then the sign seemed funny but now, it's so real: People ask me now to pay in installments."
Amid the chaos, Greek leaders dumped longtime leader George Papandreou for Lucas Papademos, an economist who vowed to shepherd a series of rescue measures such as tax hikes and benefits cuts to address the country's massive debt and ailing economy. On Thursday, talks continued between Greece and its private creditors over a deal to allow the country to receive a $170 billion bailout from European Union nations.
"The exit from the crisis won't be easy," Papademos told the parliament during a recent budget vote. "The budget has difficult and ambitious goals."
Greece has suffered from a deep recession that has lasted two years. Its debt is massive, increased even more by a spending spree with AAA-rated euros it obtained after ditching its own low-value drachma 10 years ago when it joined the eurozone. But while southern Europe was borrowing and spending, Germany and other northern European countries were making money from the rise in exports to countries such as Greece, Italy and Spain.
Unable to pay off its loans, Greece has been forced to slash its spending and public benefits, raise taxes and rely on bailouts from the wealthier EU nations. Though its new prime minister says the country has a pathway to recovery, Greeks say they aren't hopeful about a change in their lives anytime soon.
Higher taxes, high unemployment and little economic growth added to reductions in services and pensions that have been part of the attempted solution to Greece's financial ills have forced people to the brink who have never been there. Greeks have been taking to the streets to protest the changes. The government this week said that 1,580 demonstrations had been held in Athens this year.
"After 34 years of work, I can't get a pension; I need at least four more years of work," Katsikadakos said. "Plus, I have to pay 450 euros every month to the state for health insurance and social security, just because I own a company, even when I have zero income."
About 183,000 businesses will shut down by summer, according to a new study from the General Confederation of Professional Craftsmen. The study expects that 100,000 of those will close in the next month or two, leaving hundreds of thousands of people jobless.
One out of four small- and medium-size-business owners say it's possible they'll declare bankruptcy in the next year, according to a recent state survey. If true, it would mean 320,000 lost jobs.
Maria Katsikadakou, 60, Katsikadakos' wife, who came by to see if her husband wanted lunch, is equally glum.
"We're still open because we own the store," she said. "Business owners that had to pay rent for their stores were forced to close."
Growth is stagnant
Timos Melissaris, an economist and a self-employed private investor, says the problem is that the public sector grew so large, it is now squeezing the private sector.
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