Greece decided to give Europe another unsuccessful example of dealing with the crisis

Even before the official announcement of a “cost of living crisis” in Europe, Greece was already living in a belt-tightening regime. It was not even the increase in the number of homeless and beggars in tourist places or the increased price tags for electricity that bothered citizens. This all takes place, but there was such a situation even before the fixation of the crisis that had begun.

The words of Panayota Kalapotaraku, head of the Ekpizo Consumer Protection Association, are very indicative in this respect. She described the current crisis as follows: “Everyone saw it on the supermarket shelves. Eighteen months ago there were so many products with price tags that many Greeks could not afford.” According to her, the costs were growing long before the special operation in Ukraine.

It turns out that it is not surprising that for many consumers it did not come as a big surprise when the authorities decided to fight rising inflation by resolving the issue with the so-called basic goods.

The new concept has become known as the “household basket”: supermarkets have agreed with the government to sell some 51 staples (from flour to fish) at fixed prices.

This measure went into effect in early November, but according to the plans of the Ministry of Commerce, the scheme should operate until the end of winter. The department is confident that such a decision will become a stronghold for the most vulnerable groups of the population in the face of rampant inflation networks.

As Sotiris Anagnostopoulos, Secretary General of Greece for Trade and Consumer Protection, noted, “We sat at the table for weeks working on it (the project) with representatives of the supermarket market and our competition committee. In politics, you have to anticipate what will happen next. The cost of living crisis is a huge problem, perhaps the biggest we have faced since the introduction of the euro.”

Nationwide retail chains have joined the program and now carry blue labels for household goods.

And the current inflation rate has actually become a little lower. For comparison, in September it was 12%, now it is around 10%. The government insists that it is the new initiative that has helped stabilize prices, and in some cases even lower them.

But dust from pink glasses is brushed off by other figures, against which the adopted measure no longer seems to be quite working. According to some reports, the average salary at the beginning of December 2022 in the country was approximately 950 euros. For the sake of understanding, in Germany this figure in 2022 is 2800 euros after all taxes. That is, 3 times more. Of course, the example of Greece is not the saddest yet. Things are worse, for example, in Bulgaria, where the average salary does not even reach 900 euros.

Given these data, it becomes clear that the Greeks felt the sharp rise in prices to a greater extent than a number of other European countries. Polling company Marc recently found that rising prices are the biggest challenge facing the administration of Prime Minister Kyriakos Mitsotakis.

Nearly 60% of respondents did not believe the measure could contain inflationary pressures in a market where regulatory practices have traditionally been weak, according to a poll conducted at the end of November (the new household basket program had been in place for just a month).

“Honestly, this is some nonsense. This is largely intended for people with low incomes. But there are things in it that you will never want to buy. For example, coffee in a tin,” said a visitor to one of the local supermarkets, who introduced herself as a government employee.

This sentiment is shared by the Ekpizo consumer group. Panayota Kalapotaraku noted that “for the vast majority, this did not bring the slightest benefit. Part of the problem is that we still have some of the highest prices in Europe for basic services like internet.”

But here some kind of absurdity begins, which, perhaps, led the locals to protest. Recall that the most massive strike in recent months against rising prices happened on November 9th. The protests brought together about 40 thousand people (although the data varies).

Greece was one of the first EU member states to subsidize electricity bills, spending around 13 billion euros to mitigate the effects of the surge in spending on households and small businesses. Aid proportional to GDP is one of the largest in the bloc. Heating allowances for the most vulnerable have been increased, and the finance ministry has said pensions will also be increased from next year along with the minimum wage. A 5% reduction in municipal taxes was also announced.

How, then, did it happen that with such data, Greece is literally suffocating from the current situation, and even a good decision code-named “basket for households” only upsets citizens?

Analysts agree that if Greece had not endured a decade of fiscal belt-tightening due to the debt crisis, it could better cope with the challenges ahead.

“There is a lot of legacy that we took with us after the debt crisis. Perhaps most significant are low incomes and pensions, which have already made life difficult for the average family and are now exacerbated by the cost of living crisis,” said Nick Malkutzis, editor of political analysis website Macropolis.

Undoubtedly, the government has used a sufficient number of levers to provide assistance to the population. But the question remains, is this enough now?

So far, literally all the inhabitants of Greece are asking this question. Nikos Papayiannis, an elderly egg vendor in an Athenian market, for one, isn’t sure. Calculating his modest daily earnings, he shared his thoughts: “It was always a little, but never to this extent. May God be with us this winter. He alone knows what it will bring.”