BUSINESS

Cash still king for the majority of Greek consumers, employers

EVGENIA TZORTZI

TAGS: Economy

Greeks love cash: Not only do they make most of their payments in cash – more than in any other eurozone country – but they also use it to pay their regular monthly obligations, such as utility bills, rent and even their taxes.

The main reason for this proclivity for paper money is not an inherent aversion towards electronic payments, but that the vast majority of Greeks, far more than in other eurozone member states, still get paid in cash.

This is evident in the recent European Central Bank survey on cash use in eurozone households, which showed that 57 percent of Greeks are paid in paper. Cyprus and Slovenia come a distant second, with a rate of 28 percent, while in the other eurozone countries the share of people getting paid “cash in hand” ranges between 5 and 20 percent.

Behind this particularly high rate of people paid in cash in Greece lies the large number of small or family owned enterprises and freelancers who work for cash. This also serves to illustrate the extensive tax evasion in this country, which tends to be focused on a series of professional categories, mainly among freelancers.

The above figures concern 2016, while banks estimate that this picture has started changing considerably after the compulsory payment of salaried workers via a bank account from early 2017.

The ECB figures show that the cash culture is not a strictly Greek phenomenon, as 79 percent of transactions in the eurozone – with great variations from country to country – are conducted with coins and banknotes.

Yet contrary to European habits, Greeks use cash for a series of transactions that are regular every month: 40 percent of Greeks pay their taxes in cash against just 9 percent in the eurozone, 50 percent use paper to pay for their insurance against 10 percent in the eurozone, and 70 percent pay for their medicines in cash against 31 percent in the eurozone. Similarly, electricity and phone bills are paid by 60 percent of Greeks in cash, compared to 16 percent in the eurozone, and 30 percent of rents are covered by cash against just 6 percent in the eurozone.

ECB data also revealed that Greeks hold an average of 80 euros in cash on them, against the Spaniards’ 50 euros and the Italians’ 69 euros, while the Portuguese like to keep just 29 euros at hand.

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