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Greeks Wait and Worry About Next Paycheck, and Their Future
By JIM YARDLEYMAY 18, 2015
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The striped flag of Greece and the starred flag of the European Union this week in Athens as negotiators from both sides explored ways to ease a cash crunch. CreditAngelos Tzortzinis/Agence France-Presse — Getty Images
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Greeks Wait and Worry About Next Paycheck, and Their Future
By JIM YARDLEYMAY 18, 2015
Photo
The striped flag of Greece and the starred flag of the European Union this week in Athens as negotiators from both sides explored ways to ease a cash crunch. CreditAngelos Tzortzinis/Agence France-Presse — Getty Images
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Prime Minister Alexis Tsipras, center, who said Monday that a debt deal was near, but that he would not buckle to creditors. CreditAlkis Konstantinidis/Reuters
For now, the waiting is painful enough.
Greek importers say trade is frozen by a lack of credit and demands by overseas suppliers for payments in cash. Retail sales are slumping as the broader economy has contracted. Worried depositors are withdrawing money from Greek banks, while hoteliers say tourism seems to be slumping, as visitors are nervous about what might happen if the country goes bankrupt.
In the absence of clarity, Athens is a hothouse of speculation, confusion and white noise. Rumors of deals or of breakdowns in negotiations are common, including on Monday when a European Commission spokeswoman said on Twitter that she “can’t confirm” news reports that a new proposal was being floated by the president of the European Commission, Jean-Claude Juncker.
Radio talk shows game out different chains of events and either praise or pillory Prime Minister Alexis Tsipras. In a Monday evening speech, he told industrialists that an agreement “will come very soon,” even as he vowed not to buckle to creditors. Elected on an anti-austerity platform, Syriza leaders send out mixed signals almost daily, with hard-liners vowing not to cross any “red lines” on new pension cuts or liberalizing the labor market even as party moderates are talking about honorable compromise.
“Even a relatively mediocre, satisfactory deal is better than a split, both for the lenders and for Greece,” Dimitrios Papadimoulis, a high-ranking Syriza official and member of the European Parliament, told the Greek news media last week, adding that failure to reach an agreement “would be very expensive and painful for everyone.”
The immediate uncertainty concerns when, and if, the Greek government will run out of money. Merely meeting payroll merits news coverage; when the government met the salary and pension obligations due last Friday, the English-language edition of Kathimerini, a national newspaper, posted an article online with the headline, “Pensions and Wages Paid But Only Just.” The same day, Greece’s Foreign Ministry ordered embassies around the world to return to Athens any extra cash to help in the liquidity crisis.
On Monday, a government spokesman, Gabriel Sakellaridis, said Greece wants a “technical” agreement this week and needs a finalized deal by the end of May, given the cash crunch. “There must be a deal immediately — and this is why we are talking about the end of May — so that these critical issues of liquidity can be resolved,” Mr. Sakellaridis said in a televised news conference.
The fact that Greece is still hobbling along is partly testament to financial trickery. It made a May 12 payment of 750 million euros (or about $848 million) to the International Monetary Fund by depleting funds in its own emergency reserve account for the I.M.F. The government also has revived tax collections, which collapsed in January, after passing a recent law that allows Greek citizens to waive many delinquency fines and begin paying back tax arrears through as many as 100 monthly installments.
But experts, if praising some aspects of the tax law, also note that it cannot raise enough money for Greece to pay back loans and meet other obligations. “That is pocket money,” said Antonis Mouzakis, an Athens accountant and commentator on Greece’s economy. “We are expecting 400 million by the end of the year. That is pocket money to the lenders.”
When Mr. Tsipras took power in late January, many Greeks were heartened by his administration’s confrontational approach toward the I.M.F. and the country’s other two creditors, the European Commission and the European Central Bank. Even today, public opinion polls show that Syriza remains the country’s most popular party.
But the polls also underscore the political tightrope Mr. Tsipras must walk: While many Greeks want the government to come to a mutual compromise with creditors so that Greece can remain in the eurozone, many oppose raising sales and service taxes, a basic demand of lenders.
This type of contradiction has accentuated the political uncertainty about how different factions of Syriza will react when Mr. Tsipras — as analysts expect — makes a final compromise to reach a deal. Last Friday, Mr. Tsipras told business leaders that his government could agree to “marginal changes” to taxes.
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RECENT COMMENTS
W Smith
9 minutes ago
I was just in Greece last week visiting Athens and the islands, and could see no outward traces of the crisis except for quite a few empty...
Paul
26 minutes ago
This should be a warning to conservatives here whose new kick is eliminating state income taxes and paying for government services by...
Mathias Weitz
43 minutes ago
It is not about debts.Greece is by 160%, that is hardly worse than portugal, italy or ireland, who have 130%. Portugal is nearly on the same...
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“On all these areas, they will have to accept an agreement that is not what their party, their program, their ideology and their government would have wished,” predicted George Pagoulatos, a political analyst in Athens.
Yet the prospect of more days or weeks lost to political wrangling clearly alarms many businesspeople. In the lobby of the Electra Palace Hotel on Friday morning, one man was shouting into his mobile phone, complaining that the uncertainty about whether Greece would cut a deal to remain in the eurozone — or possibly default and return to its old currency, the drachma — was damaging the tourism trade at the worst possible moment.
“Reservations have frozen,” he said, angrily. “Tsipras has to make up his mind yesterday, whether it is going back to the drachma or a deal with Europe. This cannot go on.”
George Kavvathas, president of one of Greece’s largest associations of small-business owners, blamed austerity policies instituted by creditors for dooming the Greek economy and increasing public and private debt. Yet he said the uncertainty about what comes next has been destructive and predicted that 8,500 small businesses would close during the first six months of this year.
“The average person doesn’t know if we’ll remain in the euro or go to the drachma,” he said. “They don’t know what the deal will entail and how bad the measures will be.”
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At the repair yard where crews work on city buses and other support vehicles, the anxiety is especially pointed among the workers whose salaries hang in the balance. “The stress is overwhelming,” said Theodoros Zontos, 58. “My money will run out long before my salary is due on the 27th.”
Mr. Kalfakis, the mechanic, said his net wages were reduced in 2012 to €1,100 a month from €1,800, even as his three fellow mechanics were laid off. Now he and others say they are closely watching the political negotiations and hoping that the uncertainty hanging over Greece finally can be resolved.
“It is a word in our daily vocabulary now,” he said.
Dimitris Bounias and Niki Kitsantonis contributed reporting.
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- http://www.nytimes.com/2015/05/19/w..._id&bicmst=1409232722000&bicmet=1419773522000
