Barely a day after securing more international aid in exchange for yet more draconian reforms, Greece got a bitter taste of the price of austerity on Tuesday, when statistics showed that retail sales had shrunk by more than 30% over the past three years.
The impact of spending and budget cuts on private consumption has had a devastating effect on commerce, the engine of the Greek economy, according to the debt-stricken country’s statistics agency, Elstat.
With some 27.5% of Greeks officially unemployed – a eurozone record – retail sales dropped by 14.4% year on year in February, following a slump of 16.8% in January.
“The economy is in freefall. Not since the second world war has the situation been as bad,” said Prof Valia Saranitou, at the national confederation of Greek commerce (ESEE).
“An unprecedented 150,000 small and medium-sized businesses have closed in an economy that works on internal demand,” she told the Guardian, adding that Greece’s widely praised exports rebound had been grossly exaggerated.
Since the eruption of Europe’s debt crisis in Athens in late 2009, retail sales had plummeted by more than a third – 34% – the statistics service said.
The decline in the real economy – and on the shop floor – reflects the huge drop in disposable income suffered by ordinary Greeks since the outbreak of the crisis.
Although the nation has narrowly averted bankruptcy with the help of the biggest bailout in global history – €240bn (£203bn) in rescue funds from the European Union and International Monetary Fund since May 2010 – prospects of the country returning to capital markets any time soon remain far from assured.
The Greek prime minister, Antonis Samaras, highlighted the country’s plight, telling ministers on Tuesday there was not a day to lose in the nation’s battle to keep bankruptcy at bay.
Πηγή: The Guardian