6th Jul 2022

Greek shops, cafes hit by capital controls

  • Tourism could fall 20 percent (Photo: traxus4420)

If you took a walk down a typical street in central Athens, you might not notice the country’s economy is on the brink of collapse.

But in fact, thousands of small businesses, which make up for over 90 percent of companies in the debt-stricken country, have barely any income these days.

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Despite the sale season, clothes shops and electronics stores, for instance, are making few sales. Some prefer to remain shut.

The bank holiday, enforced since 27 June, has all-but frozen the local economy, resulting in losses of over €1 billion, according to the Greek commerce confederation.

Bank transactions within the borders of Greece are allowed. But for the second week running, Greeks can only withdraw €60 a day from ATMs.

Since many banks have run out of €20 notes, in practice it means €50.

Meanwhile, fears grow, that if talks go badly in Brussels, the government might be forced to impose a haircut on depositors’ acounts.

The situation has prompted some Greeks to spend their money in case they lose it.

John, a hotel owner,said he bought himself tickets to go to India and the “most expensive laptop” he could find.

Others are buying gold and jewellery.

But the panic-buying is an exception.

Meanwhile, capital controls have also hit tourism - an important pillar of the Greek economy, which represents one in five jobs.

The Association of Hellenic Tourism enterprises says hotel bookings are down 50,000 a day. Its grim forecast is that tourist arrivals will drop by nearly 20 percent this year if the crisis continues.

Meanwhile, travel agents are struggling to do their job. Airline companies now request payments up front by credit card or cash, while before people were entitled to 15-day credit.

“I cannot issue tickets and had to ask clients to go pay the airline company directly”, says Zefi Papayanni, a travel agent.

“The airline companies are right to take these measures - this probably happened because travel agents defaulted.”

She is thankful to those foreigners who come. But she sympathises with tourists who fear there might not be fuel for planes or ferries to get them back home.

Giorgos, a taxi-driver, said the slow-down is having a huge impact.

“I don’t even cover my expenses,” he told EUobserver. He’s been working 12 to 14 hours a day to make €10 to €15 a day.

“This is just tragic - if it goes on, I’ll have to think of doing something else.”

He has three children and rents his car from another driver.

At a cafe, opposite parliament, Alexandros, the son of the co-owner, also complained about a massive drop in income.

“No one is coming in. It’s really bad. We only get by thanks to the journalists”, he said, after waiting on a table with three English-speaking reporters.

The throngs of TV cameras and satellite dishes have invaded Syntagma square over the past week, with journalists seen doing stand-ups on the balconies of adjacent hotels.

As news of the Greek government’s latest proposal materialised, cafe owners’ fears grew.

They are to see VAT on their services nearly double, from the current 13 percent to 23 percent.

Petros, who co-owns a small but bustling cafe not far from parliament, worries that the tax hike will kill his business.

“It’ll finish us - just like that,” he says and snaps his fingers.

“Then they’ll wonder if we’ll be tax evading. [But] if we give our income to pay taxes then how are we expected to survive?.”

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