Page last updated at 10:47 GMT, Thursday, 10 December 2009

Greeks fear times will get tougher

Greek stage workers light fires outside parliament in Brussels
Greek stage workers are striking amid fears for their jobs

Fears that Greece will be unable to pay off its debts, after a cut in its credit rating, are reflected by a deep pessimism on the streets, says Philip Pangalos in Athens.

Most ordinary Greeks are increasingly fed up with government pledges to deal with the country's mounting fiscal woes, the reality that tougher times lie ahead and that they will probably have to foot the bill.

But it is time to pay the piper after years of wasted opportunities and an inability to by successive Greek governments to deal with a string of looming economic problems.

The gloomy mood is palpable on the streets of Athens.

"The economic situation here is dismal and I don't see any improvement any time soon," says Stefanos Dallas, a 42-year-old consultant.

"I'm living from month to month and have resorted to borrowing money from friends and family to make ends meet. This is not a way to live."

'One more last chance'

Greece's budget deficit is forecast to reach 12.7% of GDP this year - more than four times the maximum 3% allowed for eurozone members - while public debt levels are ballooning and are forecast to top 120% of GDP next year.

At the same time, tax evasion is rampant and is said to cost Greece some 30bn euros (£27bn) each year, which is more than the annual deficit, while analysts say the state pension system is facing collapse in the next decade unless urgent reforms are undertaken.

European debt and deficit figures

Alexandra Vovolini, the head of the Economia business media and publishing group, said: "Greeks do not like to be cornered on anything… This [essential economic reform] is one more 'last chance' for Greeks to realise their true potential as a modern European country and not as a Third World state."

Not so long ago, Greece was enjoying 4% growth - well above the eurozone average - and basking in the afterglow of a successful-but-costly Athens Olympic Games in 2004.

But Mario, a 30-year-old kiosk owner in the centre of Athens who did not want to give his surname, said times were now tougher for ordinary Greeks and everybody was feeling the effects.

"I see less business month-by-month, my turnover is down by about 3%. I work at least 12 hours every day and I still find it hard to make ends meet," he said.

The Athens stock market plummeted this week following downgrades from international credit rating agencies. It means it is likely to have to pay a much higher interest rate when it issues bonds next year to help finance the country's borrowing needs and service its existing debt mountain.


Apostolos Mokos, a cafe owner in the centre of Athens, believes Greeks like him will have to pay the price for a problem that he says is ultimately down to American banks.

Vandalised statue in Athens - graffiti reads 'Kill the rich'
Anti-capitalist sentiment is mixing with general discontent

"I'm 28 years old and I don't think I'll ever be able to retire or get a pension as the whole pension system will have probably been abolished by the time I reach retirement age," he says.

"As far as business is concerned, from my experience, times are tougher than in recent years and I don't spend as freely as I used to. At the same time, we face higher taxes on everything."

Most ordinary Greeks concede that something has to be done for the Greek economy to get back on track.

But many are not happy about the fact that they may be squeezed even further.

And some, like our first interviewee Stefanos Dallas, are just deeply cynical about the whole situation.

"The government needs to take measures now, not tomorrow, it's already too late," he says.

Previous attempts to cut deficits have just meant tax rises, without any of the required austerity measures, he says.

"The government says things will change. But I'll believe it when I see it."

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