The key to Greece’s economic crisis

October 18, 2012

By Yiorgos Karahalis

Mata Nikolarou, a jewellery shop owner in Athens, says she is not surprised that thousands of businesses in the capital have had to shut down.

“It was about time to happen. The market needed a clear off. Everyone in Greece had become a merchant, either by taking over their father’s shop or by taking out a cheap loan from the bank,” she said, explaining that most merchants had appeared out of the blue.

Almost a third of businesses and shops around the Greek capital have shut down over the last two years, as Greece’s crisis broke out and it agreed on a huge bailout package funded by the IMF and the European Union.

Mata’s little shop has been operating since 1998 but now stands alone between closed shops with rental signs on their windows. “When you do not respect your customers and your only aim is to make more money quickly by deceiving those who support you, then you will not survive” she told me. “I believe only the ones who really respect their jobs will stay open.”

Greece is now in its fifth year of recession, and the worsening situation has forced tens of thousands of small businesses to close. This adds more and more jobless people to one of the biggest unemployment rates in the European Union, at about 24 percent this year.

What is obvious is the Greek reality that over the last few decades the country’s economy was based on consuming, and that is why more and more Greeks over the years would open shops in order to make a living. When the repeated austerity measures led to severe cuts to wages and spending, the first sector to be hit was trade, especially the thousands of small shops which made up a big part of the economy. Anti-austerity protests in the city center, which have sometimes turned violent, also drove Athenians away.

“I have no idea what a loan is,” said Yorgos Litsikas, a 72-year-old leather supplier who runs a small business which was first opened by his grandfather back in 1870. “I’ve had the same clients for years and I get recommendations for any new ones so that keeps the work flowing without any unpleasant surprises”.

Well, I’m among those who believe that the crisis can only make us better. When something bad happens we must think that is not one man’s fault. So, Greeks must first find where they’ve made mistakes, get back on track and then find the right leadership to drive the country out of the crisis.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see