How bad is the economic mess in Greece? Just ask Dimitris Skiadas, a despairing Athens accountant who is struggling to keep his clients’ finances in some kind of order in a fifth year of recession.
Added to the euro zone laggard’s many economic woes, Skiadas said the trust needed to do business has gone up in smoke since the debt crisis began in 2009 and spread across Europe.
Foreign suppliers are asking to be paid in cash, a system of post-dated cheques used to settle accounts between companies is imploding and talk about a possible exit from the euro is putting a lot of business on hold.
“It’s a disaster!” said Skiadas, as he fielded calls in his office in Athens.
Most of his clients are small businesses worried about the prospects for the economy, with many on the verge of bankruptcy.
His work now more involves legal trouble and calling up clients to get paid.
“Even small projects are cut down or blocked because everybody is expecting a devaluation” after a possible future euro exit, said Skiadas.
The crisis, he said, has created a vicious circle in which the austerity measures aimed at ultimately aiding the economy are in fact blocking activity.
“Starting in 2009, salaries were cut in the public sector. Consumption went down. Then retail businesses started firing people and lowering wages. Consumption went down further. Then in the next circle, suppliers for the retail sector were hurt too,” he said.
Regardless of the recent landmark elections, which brought a conservative-led coalition to power, many young Greeks have been voting with their feet and emigrating or trying to get an education abroad.
Skiadas sees the effects of this devastating recession on the ground. The biggest trouble, he says, is the breakdown of trust, which makes Greeks wary of doing business with each other and keeps away foreign firms.
“There is no trust any more. Even small projects are blocked,” he said.
“Everybody is suing everybody to get their money back,” he said.
Many cheques bounce, and “It’s a problem because we were buying the future.” Shopping to keep the economy going, perhaps.