Greece is not in a recession. It is in a Depression.
Just when you think Greece’s financial implosion can’t get any worse, a new wrinkle emerges to further frighten observers worried about the country’s prospects. On Tuesday, the New York Times warned that dwindling tax proceeds could quickly leave the country out of cash, and headlines continue to blare that Greece’s “agony” won’t end with new elections on June 17. Greek voters face a choice between harsh austerity measures being imposed in exchange for a financial bailout or facing the bleak possibility of leaving the eurozone entirely.
Thirty percent of Athens shops have closed. On some streets, half the shops are shuttered. The commercial sector is in the grip of a closure epidemic which is spreading like a contagious disease. And in the heart of central Athens, a stone’s throw from the city’s glorious ancient sites, the tragic face of today’s Greece is on display. Here, we look at the human toll taken by the country’s shocking downturn in a series of photographs taken in Athens on May 22-29, 2012.
Greece’s economy is really messed up right now:
- Unemployment is at 22%
- Their credit rating is abysmally low. Almost no one will lend them money, and the current interest rates on a 10-year Greek bond is at an incredible and unsustainable 30% (the comparable US bond is at 1.65%).
- Their public debt is at about 160% of GDP, which puts them in the top five for highest debt-to-GDP ratio.
- Their GDP has shrunk by a huge amount–it’s currently shrinking at 6.2%. This is a massive contraction. In comparison, the United States GDP is growing at 2.2%.
- A quarter of the population is living below the poverty line.
- As a part of austerity packages, minimum wage is being cut, state jobs are being cut, pensions are being cut, health sectors are being cut, etc. This is not good for the economy
- A large percentage of the population is employed in relatively low-income agricultural occupations, and a relatively large percentage of the population is retired. An aging population is more difficult to support.
tl;dr: Greece has problems