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Economy

Cash-Strapped, Highly-Taxed Greeks Find They Can’t Save Any Money

ATHENS – Despite an accelerating economic recovery, many Greeks and households are finding it next to impossible to save money, caught between some of the European Union’s lowest salaries and highest tax rates.

A Eurobank study titled “Savings in Greece – Why We Don’t Save” revealed that the phenomenon began around 2002, shortly after switching from the drachma to the euro, but that the worst period was between 2018-2022.

This includes the last 1½ years of the rule of the Radical Left SYRIZA, which was ousted in a 2019 rout by New Democracy and Prime Minister Kyriakos Mitsotakis, who decisively defeated the Leftists again in the 2023 elections.

Mitsotakis has revitalized an economy that was on the brink of collapse during the 2010-18 economic and austerity crisis, which saw Greece require three international bailouts totaling €326 billion ($354.54 billion) to stay afloat.

However, stubborn inflation, corporate price gouging, and high supermarket prices have hit the middle and lower classes the hardest, while the wealthy continue to prosper and the government courts big business and private investors.

The study found that households with two adults and children are €2,159 ($2,348) in debt, with no savings, while the average annual savings amount to just €1,076 ($1,170.20) in the bank.

This is somewhat at odds with banks reporting that deposits in December 2023—when Christmas bonuses were distributed—rose by €6.4 billion ($6.96 billion), of which €3.3 billion ($3.59 billion) were by businesses.

Of the total deposits then, €146.6 billion ($159.43 billion) was in household savings, while another €48.2 billion ($52.42 billion) represented the liquidity maintained by businesses at banks.

The report stated that the average annual savings of pensioners was €2,248 ($2,444.81), while workers had only €410 ($445.89) set aside, and the self-employed reported having €63 ($68.52) in reserve.

Savings rates varied dramatically by income scale and were negative for four out of ten households in the sample, with the low levels seen as the result of a lack of disposable income, young people relying on parental handouts, and no motivation to save.

But the cost of living is also a major factor, with many unable to afford food prices, turning to generic brands or buying less, while supermarket and corporate profits soar due to constant high prices not being reined in.

There’s also the lingering effect of the economic crisis that severely impacted workers, pensioners, and the poor but exempted the wealthy, Parliament workers who threatened to strike if their pay was cut, and some privileged pensioners.

Housing costs that are now out of reach for many, with wealthy foreigners buying up multiple properties for short-term rentals, have spiked living costs, with the percentage of overburdened households in Greece rising by 37%.

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