Greece’s deep recession has forced almost a third of businesses in Athens commercial district to close down as shrinking incomes and frequent strikes have driven away customers and harsh austerity measures have made many slow spending almost to a halt. Some 68,000 businesses have closed and with more pay cuts, tax hikes and slashed pensions due, the outlook is grim, especially for the Christmas season, as the government is looking to eliminate what’s left of holiday bonuses for workers.
The austerity measures that have worsened the country’s five-year recession were insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up $325 billion in two bailouts to prop up the country’s debt-choked economy.
Even on main shopping thoroughfares and roads leading to the city’s center empty storefronts bearing the sign, “Enoikiazetai,” or “For Rent” are everywhere. Stores are advertising that everything must go as they near their final days of operation, some having been in business for decades or more. Arcades that connect buildings are nearly empty and derelict buildings abounding.
In the city’s commercial triangle where generations of merchants had run successful businesses a stone’s throw from the central Syntagma Square, an August census by retail lobby group ESEE found 31 percent of shops had closed, up from 13 percent from August 2010, just months after the government secured the first bailout, but on condition of austerity.
The austerity measures and violent street protests against tax rises and salary cuts have cast a shadow over small businesses in the city, with demonstrations alone costing them about four working hours a day, trade bodies have said. “There are no signs that this percentage will fall and this is very worrying,” said ESEE head Vassilis Korkidis, estimating that another 63,000 Greek businesses were at risk of closing down within the next year.
He said many stores were already forced out of business because of a combination of factors, including that consumers have slowed spending almost to a standstill, along with high rents as some landlords refuse to lower their rates even during a crushing economic crisis. “It will be a very difficult winter – perhaps the toughest in the last three years,” Korkidis told Reuters. “Many businesses will not make it.”
While business has slowed across the city, it is less evident in the wealthier suburbs where two of the capital’s biggest malls, home to many foreign designer brands, still attract shoppers. The study by ESEE also cited a difficulty getting funding from banks as one of the main reasons behind the closures.
The number of shuttered shops on the capital’s busiest commercial streets, Panepistimiou and Stadiou, also hit a record high in August, reaching 34.7 percent on Panepistimiou and 42 percent on Akadimias, up 14 percent in the last six months.