Greeks Get Priced Out of Summer Even After Economic Recovery

Visitors at Edem beach near Athens. It's one of the most accessible summer spots for people living in the Greek capital. Photographer: Hilary Swift/Bloomberg Photo by Hilary Swift /Photographer: Hilary Swift/Bloom

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(Bloomberg) — Summers used to be quite different for Vera Kalogera. As a child growing up Athens, she would escape the urban sprawl with her parents for an island. She would meet other families doing the same, the annual break by the Aegean or Ionian sea a near ubiquitous part of Greek family life.

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Now a 35-year-old mother, Kalogera can’t afford such a vacation. Even when planning shorter trips, Greece’s quintessential holiday spots are out of reach. “The situation is worse than in previous years when it comes to groceries, energy, rents,” said Kalogera, a teacher who lives in a district among the wealthier northern suburbs of the Greek capital. “We’ve really cut down on all our discretionary spending.”

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Greece’s rehabilitation from its economic crisis over the past decade or so has been lauded by euro region peers and investors alike. But behind the new era of healthy metrics lies a decline in living standards that’s pricing even relatively affluent Greeks out of benefiting from that recovery.

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The cost of living is weighing on populations across Europe, compounded by the recent spike in energy and food prices because of war in the Middle East. Few countries, though, stand out as much as Greece when it comes to the gap between performance of the economy and the reality for households.

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Greece is growing faster than many European peers, its budget is in surplus and it’s expected to no longer be the continent’s most indebted nation by next year.

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Inflation, meanwhile, is among the highest in the euro region, while the average annual salary of about €18,000 ($20,850) is at less than half that of the European Union.

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Together with Bulgaria, Greece places bottom in the EU for per-capita gross domestic product and purchasing power. The country also has the largest proportion of people at risk of poverty or economic marginalization after its northern neighbor.  

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With an election due by next summer that polls suggest might not produce a clear outcome, Prime Minister Kyriakos Mitsotakis has identified addressing the mismatched metrics as a top priority for his administration.

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The government has already implemented broad-ranging tax cuts and, more recently, several packages of measures to curb energy and grocery prices following the start of the war in Iran. Still, only 7% of respondents in a poll broadcast on Greece’s Alpha TV on June 16 said their economic situation had improved last year.

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Economic growth, currently running at 2% a year, must have an impact on people’s day-to-day lives, Mitsotakis said this month. “The improvement in macroeconomic figures must translate into even more tangible benefit for all,” he said.  

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Last week, the government launched a website and app called “How much does it cost?” where people can compare prices daily for 8,700 products such as foods and baby care. While the data is still a work in progress, Mitsotakis said Greek consumers now have another “weapon” in the battle against the cost of living.