Two in every three households in Greece are in a worse financial state compared to six months ago due to the coronavirus pandemic’s impact on the economy, according to a survey by Intrum.
Greece’s 67% rate – matching Romania’s – was the highest of the 24 countries that researchers at the Sweden-based credit management services company surveyed, far above the European average of 48%.
The Greek economy’s high dependence on tourism, a sector already hit hard by the lockdown and expected to suffer further, lies behind the high rate of households whose finances are deteriorating. Even countries with a lot more coronavirus cases and tens of thousands of deaths such as Britain, Italy and France are showing lower rates (55%, 54% and 41% respectively) of households reporting a deterioration in their finances from six months earlier.
This situation in Greece will lead to an increase in household debt, a reduction of saving capacity and a rise in borrowing to cover obligations. If these views recorded by the Intrum survey are confirmed in the data, we can expect to see a new debt crisis in Greece at a time when, for many, the previous crisis is not over despite the reduction in bad loans and the various settlement of debts to the state and the social security funds.
According to the survey, 61% of households in Greece think that their bills are growing faster than their incomes: This is the second highest rate after France’s (62%), while the European average stands at 42%.
Although bank deposits increased as people’s shopping options were majorly reduced during the lockdown, this trend is set to reverse due to increased obligations and lower disposable incomes. Therefore 52% of Greek households (the fourth highest rate among the 24 countries) say that they are saving less money compared to the past due to the pandemic. The European average rate stands at 39%.
Another worrying finding is that 28% of households in Greece say they are resorting to borrowing in order to pay their bills, which will likely lead to a vicious cycle of debt. In Europe the average rate stands at 18%.