Austerity in Greece

Austerity Cuts Greek Household Income 38%

Greek Reporter,

7 February, 2013

The severity of Greece’s crushing economic crisis and austerity measures demanded by international lenders has drastically cut the incomes of more than 90 percent of Greek households, with an average drop of 38 percent.

The startling numbers that illustrated how bad the crisis is for most Greeks, apart from politicians, the rich and tax evaders, came in a survey by the Marc company.

It also found that more than 82 percent say their total incomes amount to 25,000 euros ($33,900) or less because of big pay cuts, tax hikes and slashed pensions, the news agency Bloomberg reported.

Sixty-six percent of respondents said there total income doesn’t exceed 18,000 euros, ($24,100) and only 2.5 percent say they make more than 40,000 euros, ($53,570) according to the study for the Small Enterprises’ Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants.

The government keeps imposing austerity so that the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) will keep rescue loans coming. That has worsened the country’s recession, now in its sixth year and created a record 26.8 percent unemployment.

In November, 2012 Greece’s Parliament approved tax increases and spending cuts demanded by creditors for the release of funds required to keep the country solvent but exempted Parliament workers who threatened to strike if their pay was cut. The measures have been so tough that some 40 percent say they can’t pay their bills on time, mostly because of big tax hikes that are taking 40 percent of their income.

The country’s Gross Domestic Product (GDP) has shrunk by a fifth since Greece went into recession in 2008. Retail sales dropped 16.6 percent in November from a year earlier and supermarket sales fell by 500 million euros ($669 million) last year as people have cut back severely on spending, even on food.

Clothing, eating at restaurants and gifts are the categories in which most households say they have cut spending “significantly,” followed by heating, travel and recreational activities such as going to cafes, bars and the cinema. People have cut education and health spending less.

The survey of 1,207 households was conducted between Dec. 10 and Dec. 19.