Deeply indebted

Although the situation is not fully borne out by economic statistics, it has still had an effect on people’s everyday lives. The stock market plunge, the economic slowdown and the difficulty in creating new jobs are all having an impact on Greeks’ consumer behavior. From the crisis in the nightclubs and the entertainment industry in general to the return of credit at small local shops, everything seems to indicate that a large part of society is taking pains to sustain even a basic level of spending in consumer goods and long-term investments, such as foreign language courses and cramming schools for their children. A report published in the Sunday edition of Kathimerini highlights that a considerable number of Greeks have turned to consumer loans in order to keep these funds at a decent level. Unfortunately, Kathimerini’s report was to vindicate concerns that many people could fail to repay these debts, a fact that could trigger a precipitous rise in non-performing loans. The stories of people who took on financial obligations on the basis of their job salaries, which they then unexpectedly lost, or of people who were plunged into debt due to unsuccessful business overtures, all make up a picture of people who live with the threat of repossession and auctions for outstanding debts. Cars that were bought on credit are being taken away from the buyers who cannot keep up the payments, mortgaged properties are being confiscated, debt collectors are faced with numerous debtors unable to repay consumer loans and credit card installments. Fortunately, the situation has not snowballed yet, but it may do so soon should the current economic stagnation continue. And it is not certain whether the worst fallout would be the pressure on households or the aggregate effect of non-performing loans on banks and businesses. These alarming signs not only underscore a decline in economic activity but also the growth of poverty among the lower strata. Beyond the need to adapt economic policy to a possible scenario of global recession, the Greek political elite must also address the issue of the lower-income groups which the free market tends to shove into society’s margins.