NEWS

Not only are earnings lower here, but purchasing power is less, too

Are Greeks the poorest people in Europe? The answer is not that simple. What counts is not take-home pay at the end of the month, but how many goods and services that money can buy. In each case, the establishment of the eurozone in 12 countries has created a new state of affairs, in which its architects counted on price comparisons between different countries as helping to develop competitiveness between European firms in the integrated market. While this might be good for companies, which can buy goods anywhere in Europe that offers the best price-to-quality ratio, consumers cannot do the same. Even consumers living in border areas have difficulty exploiting price differentials. Without doubt, Greece occupies the lowest place in Europe, along with Portugal and some regions of Italy and Spain, in terms of earnings. There is a long way to go before Greeks become fully European with respect to the contents of their wallets. The earnings gap is partially alleviated by some of the lowest prices in Europe as far as household goods are concerned. Housing and rent are also cheaper. Nonetheless, the change in consumer models has created a new state of affairs: Goods are becoming more and more similar, since they are sold at the same price in all European countries. Even as regards foodstuffs, the difference between Greece and Germany, in prices adjusted to our earnings’ purchasing power, for example, is in the range of 10-15 percent – much lower than corresponding differences in income. Differences need to be evened out in yet another direction. While the prices of goods show a tendency to converge, services (plumbers, a haircut, two nights in a hotel or a meal at a good restaurant) remain more expensive for Europeans in wealthier countries. However, in the larger cities, the cost of services is rising at a frenetic pace. If the quality of services is also taken into account, Greece once again draws the short straw. Where the differences become most glaring is in the comparison between the cost of services supposedly provided free by the State. For example, it costs nothing to get a child through one class of senior high school in other European countries. For a Greek family though, the cost [of cramming institutes, foreign language institutes] is considerable. The picture worsens when we consider the price Greeks have to pay for driving on bad, dangerous roads or using deficient public transport and the like. A full comparison should take into account taxation on income, social security and healthcare contributions for each profession, and even the scale of salary differentials linked to promotions. In each case, the conclusion is that most Greeks are poorer than most Europeans, especially those inhabiting large cities, and will remain so for many years to come. It took many years of effective economic and social organization, hard work and high productivity for European countries to achieve what Greeks would like to achieve in one leap. In the competitive environment of the modern world, goods are hard to come by – even when people work endless hours at a second job or in other gray areas of the modern Greek reality.