Journey
across crisis-hit Greece
The
Karinos family sit under the garden vines, taking shelter from the
intense midday sun: three generations, brought together by Greece's
financial crisis.
BBC,
11
June, 2012
Until
last year, Thomas and Eleni lived with their two children in Athens.
But as they lost their jobs and faced soaring taxes, they decided
that the everyday struggle of city life was too much. The family
moved back in with Thomas's mother in her house in the tiny village
of Pahikalamo, in north-west Greece.
Around
a simple lunch Eleni tells me there was no other option. "We
lost our income and had two children to raise," she says. "I
was waking up and doing nothing except trying to find work. And then
I couldn't sleep at night because I so worried about tomorrow."
She
tells me several of her friends are thinking of following suit -
including her sister-in-law. "The economic times force us to
leave the city. I didn't choose to do it - the situation made me come
here and that's what I didn't like. I wanted to have my own opinion,
but I couldn't."
As
Greece sinks deeper into the worst financial crisis in its modern
history, unemployment has soared to 21% - and 54% among young people.
With
businesses closing and a third of Greeks now thought to live below
the poverty line, the urban exodus is gathering pace. Thousands are
thought to have left the cities: almost 70% of those questioned in a
recent survey said they were considering doing so.
Life
is simpler and less expensive in the countryside, but it too is
suffering: the Epirus region, the new home of the Karinos family, is
one of the poorest parts of the European Union.
As
Thomas's mother, 73-year-old Paraskevi, sits at the lunch table,
listening again to her children's story, she begins to cry. But the
smile returns to her kindly face as she tells me of the pleasure her
family bring her - and the company they provide.
"If
they had work of course I would like to see them stay in Athens,"
she says. "I had a hard time growing up here - we were very
poor. I was hoping my children would have a better life. But it makes
me sad to see that it hasn't turned out like that. Our governments
have made a mess of things. They've destroyed Greece."
Political
upheaval
The
anger against the political class for chronic mismanagement of
Greece's economic crisis is likely to be vented at the ballot box in
Sunday's election.
The
eel farm does not provide enough to support the whole Karinos family
In
the last election on 6 May - which failed to produce a conclusive
result - the two big parties in power for most of the past four
decades were decimated by a furious, exhausted nation. They
haemorrhaged support to newer, smaller parties, which promise to
abolish the austerity measures that have brought the country to its
knees.
And
polls show a similar result may be produced again this time, although
European leaders warn deviating from the cost-cutting path could lead
Greece out of the euro.
But
whatever happens in Sunday's election, Greece's recession has already
had a marked impact on the country's demographics.
During
the decades after World War II, hundreds of thousands left rural
areas for the bigger cities that were beginning to prosper. The
population of Athens alone doubled between 1950 and 1980. But now the
process is being reversed - Greeks are moving in the other direction,
away from urban financial hardship as the effect of the crisis
deepens.
Thomas
Karinos has found some work in a local eel farm, but the family, like
so many, now rely in part on their small plot of land. They have a
few sheep and chickens and have started to grow oranges. But for the
children - 16-year-old Konstantinos and Evelina, 13 - it is a hard
adjustment from city life.
This
lake provides some solace for a family hit by hard economic times
"We
got used to things in Athens and now it's not so easy here",
Konstantinos tells me. "I miss the city a lot and would like to
go back. I don't think I can have a future here. It makes me sad
seeing that we had to move - but we couldn't do anything else."
And
so as the impact of this country's crisis runs ever deeper, Greeks
are falling back on their traditional family bonds as their final
safety net. They remain strong and loyal - a rare antidote to the
pain of the recession.
A
few minutes from the Karinos family's new home lies a small lake - a
picturesque place with old wooden boats surrounded by reeds and
flowers. They come often, they say - a good place to think.
"I
am beginning to like it here, I guess," says Eleni. "In
Athens we couldn't live - we couldn't even survive. At least here we
can survive."
Greek
Blackouts Risked As Power Companies’ Cash Runs Out: Energy
Greece
faces the threat of rolling power blackouts as the economic crisis
leaves utilities without cash to pay for natural-gas imports and
operate power stations.
11
June, 2012
Regulators
will meet with Greece’s power market operator as early as today to
discuss an emergency loan of 300 million euros ($375 million) to
cover payments for gas imports from Russia’s OAO Gazprom (GAZP),
Turkey’s Botas AS and Italy’s Eni SpA. (ENI) The country’s
largest power producer is almost out of money and likely to default
after unpaid accounts jumped more than 50 percent in a year,
according to Standard & Poor’s.
As
Greece prepares for a second national election in six weeks, a vote
that may determine whether it remains in the euro, the collapse of
the energy sector has emerged as a risk for a country that imports
most of its oil and gas. At the start of the main vacation season,
power cuts that leave tourists trapped in dark hotels without air
conditioning would be a further blow to an economy in its fifth year
of recession.
“Blackout
is definitely a risk,” Olivier Jakob, managing director of Zug,
Switzerland-based energy consultant Petromatrix GmbH, said in a
telephone interview. “Greece is going to face higher costs because
suppliers will want to have better creditor protection. And if the
country cannot pay the bill, well, it’s a real problem.”
Public
Power Corp SA (PPC), the biggest electricity producer, is on the
verge of default, Standard & Poor’s analysts Nicolas Rivier and
Vittoria Ferraris said in a June 7 report. PPC, as the Athens-based
company is known, has seen cash flow drop as unemployment and falling
wages leave many Greeks unable to pay power bills. A lack of cash to
pay operating expenses may force the closure of some power stations.
Limited
Liquidity
PPC
spokesman Kimon Steriotis said there was no immediate danger of power
cuts because coal-fired stations were well- supplied and reservoirs
at hydroelectric plants full. Power plants on islands not connected
to the national grid also had ample fuel, ensuring power supplies
during the tourist season, he said in an e-mail. He didn’t comment
on the prospect of the company defaulting.
PPC,
51 percent owned by the state, is struggling to manage its 4.85
billion-euro debt as it faces “extremely limited liquidity” and
must refinance 525 million euros by June 29, Chief Executive Officer
Arthouros Zervos said on a conference call with analysts on May 29.
“PPC
has almost fully depleted its liquidity, owing to sharply falling
earnings, climbing overdue receivables, and the absence of new credit
facilities,” S&P said in the report, cutting the company’s
rating to the lowest level above default. “PPC will likely default
on its obligations in the near term.”
Depend
on Imports
With
practically no gas or oil deposits of its own, Greece depends heavily
on imports to keep power production and the transportation sector
going. Oil represented about 55 percent of the country’s total
primary energy supply while natural gas accounted for 11 percent in
2008, according to the International Energy Agency.
The
prospect of sporadic power shortages come as officials grapple with a
mounting social crisis. Unemployment is at 22 percent, the country
faces shortages of imported food and drugs, and Bank of America Corp.
says the country may run out of cash by early July.
The
Greek electricity market operator has applied to the Greek Deposits
and Loans Fund for a 300 million-euro loan to pay off its debt to PPC
and other energy companies, which in turn owe 300 million euros to
Greece’s gas company Depa, its spokesman said. Depa, which buys gas
from Gazprom, Botas and Eni, has threatened to cut supply if it isn’t
paid promptly.
Limited
Blackouts
Although
gas provides only 22 percent of Greece’s power supply -- the
majority comes from domestically mined coal -- disruption to imports
could force limited blackouts, said Paris Mantzavras, an energy
analyst at HSBC Holdings Plc (5) in Athens.
“If
gas supplies are completely cut off, then yes, there is a danger of
blackouts,” he said in an interview. “Not major ones, but
probably some rolling blackouts. It would be critical for the
industry and manufacturing sector, and for tourism too. I would
expect the government to do its best to avoid a complete cutoff.”
Tourism
is Greece’s biggest industry, accounting for almost 16 percent of
the economy in 2001, according to the London-based World Travel and
Tourism Council.
Crude
Supplies
Supplies
of crude oil are also in question. Greece had been importing the
majority of its oil from Iran, which stopped shipments at the end of
March because of Greece’s failure to pay up. The country has since
been forced to seek other suppliers from the Middle East, central
Asia and Libya under less favorable conditions, analysts say.
“They
have to rely on a couple of traders able or willing to handle the
risk,” Petromatrix’s Jakob said. “But that comes at a price, of
course.”
Greece
agreed to reforms in the energy sector, including opening up the
electricity market faster, as part of pledges to receive a 110
billion-euro bailout in May 2010 and a second aid package of 130
billion euros this year. Plans to sell energy plants and cut the
state’s holding in PPC have been put on hold until after the
election.
Election
Campaign
The
six-week election campaign has kept Greece from solving even its most
immediate problems. The process led to a decline in state revenue
collection, a standstill in the state-asset sales program and putting
off a permanent bank recapitalization plan until after a new Cabinet
is formed.
The
upcoming election may determine whether the country stays in the
17-nation euro. The inconclusive May 6 ballot showed gains for
parties, led by Syriza, that oppose terms of the country’s bailouts
from the European Union and the IMF.
Syriza
leader Alexis Tsipras has said he will halt state- asset sales and
nationalize banks if he wins the June vote. After political party
leaders failed to form a coalition government in May, speculation
that Greece will abandon the euro rose.
The
Athens Stock Exchange index has fallen 21 percent since May 6 and the
euro has weakened 4 percent against the dollar. Public Power shares
dropped 2.1 percent to 1.40 euros at 3:22 p.m. in Athens today.
An
exit would see the government take control of all oil and gas imports
as the state managed limited foreign currency reserves, said Elias
Konofagos, vice president of Athens-based consultant Flow Energy &
Environment Operations SA.
“For
a long period of time they would import a portion of what’s needed,
which would lead to rationing, even for gas for cars,” Konofagos
said in an interview.
Meanwhile,
PPC is struggling to collect payments from customers. The utility was
owed 763 million euros from non- industrial customers in March,
compared with 414 million euros the same month a year earlier. The
jump came after the government announced a property levy in September
which was collected through electricity bills.
“Greece’s
energy sector could collapse,” S&P said. “Repeated blackouts
likely to ensue might discourage users from paying their electricity
bills.”
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