[Greece] Price hikes put pressure on minimum wage

Expert predictions and pandemic modelling suggest that the upwards trajectory of new COVID cases in Greece is decelerating, with a peak in new cases expected over the next couple of weeks. Now thoughts have turned to the pandemic’s economic impact and the dramatic price hikes almost across the board, ekathimerini.com reports.

The erosion of purchasing power led to a 20 per cent decrease in turnover during the holiday season in comparison to last year, according to an extensive Association of Business and Retail Sales in Greece (HRBA) study. It found that 58 per cent of households spent less than they did last year, with 31 per cent of those spending less than half.

And greater hurdles lie ahead. It is reportedly expected that households will face a 5-10 per cent price increase in their shopping bill by the end of the first quarter, as a result of an increase in prices set by importers. Goods will also become more expensive due to consumers assuming a surcharge to cover part of the increased operating costs of retail networks.

Price hikes will not only be limited to groceries, as they will be cumulative across the foodstuffs industry and noticeable in electricity and wider energy bills, public utilities and consumer goods that will be affected by the increase in energy costs. They will also affect the rental prices of homes, office spaces and retail stores.

Some people will be able to withstand the storm but not the economically vulnerable households, who after a deflationary struggle that lasted for more than 10 years, face a treacherous period of inflation. According to ekathimerini.com, this marks an important differentiating factor when comparing Greece to other countries. There will be similar price increases recorded in other countries but none of them has lived with the financial restrictions and belt-tightening Greece has experienced since 2010. The country’s resilience - and particularly that of salaried workers - is said to be almost exhausted.

According to the latest data by the General Confederation of Greek Workers, one in two households is unable to cover emergency expenses, 35.5 per cent of households are struggling to cover their basic needs and 27.9 per cent of households are on the brink of poverty. 

A second significant difference is that other countries are better able to support the more vulnerable members of their society than debt-laden Greece. 

A third issue is that many Greek markets exhibit low or non-existent levels of competition, while the Hellenic Competition Commission often reveals that it is less independent than it claims.

What can be concluded from this? Across-the-board measures on energy subsidies have shown their limited usefulness. This reportedly applies to all such horizontal measures because Greece does not have an excess of money (quite the opposite) and when spent, resources should be targeted and used where the need is greatest and the greatest good can be achieved.

If votes are the number one priority of the current government, salaried workers cannot be the only ones to show “restraint.” In fact, they would be justified to immediately ask for the implementation of Prime Minister Kyriakos Mitsotakis’ express commitment to increase minimum wages at twice the rate of any GDP increases. 

Expert predictions and pandemic modelling suggest that the upwards trajectory of new COVID cases in Greece is decelerating, with a peak in new cases expected over the next couple of weeks. Now thoughts have turned to the pandemic’s economic impact and the dramatic price hikes almost across the board, ekathimerini.com reports.

The erosion of purchasing power led to a 20 per cent decrease in turnover during the holiday season in comparison to last year, according to an extensive Association of Business and Retail Sales in Greece (HRBA) study. It found that 58 per cent of households spent less than they did last year, with 31 per cent of those spending less than half.

And greater hurdles lie ahead. It is reportedly expected that households will face a 5-10 per cent price increase in their shopping bill by the end of the first quarter, as a result of an increase in prices set by importers. Goods will also become more expensive due to consumers assuming a surcharge to cover part of the increased operating costs of retail networks.

Price hikes will not only be limited to groceries, as they will be cumulative across the foodstuffs industry and noticeable in electricity and wider energy bills, public utilities and consumer goods that will be affected by the increase in energy costs. They will also affect the rental prices of homes, office spaces and retail stores.

Some people will be able to withstand the storm but not the economically vulnerable households, who after a deflationary struggle that lasted for more than 10 years, face a treacherous period of inflation. According to ekathimerini.com, this marks an important differentiating factor when comparing Greece to other countries. There will be similar price increases recorded in other countries but none of them has lived with the financial restrictions and belt-tightening Greece has experienced since 2010. The country’s resilience - and particularly that of salaried workers - is said to be almost exhausted.

According to the latest data by the General Confederation of Greek Workers, one in two households is unable to cover emergency expenses, 35.5 per cent of households are struggling to cover their basic needs and 27.9 per cent of households are on the brink of poverty. 

A second significant difference is that other countries are better able to support the more vulnerable members of their society than debt-laden Greece. 

A third issue is that many Greek markets exhibit low or non-existent levels of competition, while the Hellenic Competition Commission often reveals that it is less independent than it claims.

What can be concluded from this? Across-the-board measures on energy subsidies have shown their limited usefulness. This reportedly applies to all such horizontal measures because Greece does not have an excess of money (quite the opposite) and when spent, resources should be targeted and used where the need is greatest and the greatest good can be achieved.

If votes are the number one priority of the current government, salaried workers cannot be the only ones to show “restraint.” In fact, they would be justified to immediately ask for the implementation of Prime Minister Kyriakos Mitsotakis’ express commitment to increase minimum wages at twice the rate of any GDP increases.