Anecdotal Observation: The Greek Economy

A quick note on the Greek economy, which everyone knows is in deep trouble.  Our goal in coming to Greece was to see the ancient sites, not study the economy, but just by being here, we did pick up a few things.

Like the rest of the world, nobody here knows what's going to happen, but it's clear enough that the current scheme isn't going to hold up indefinitely, or even for more than another year or so.  Many people are extremely angry about it but are not sure who to blame.  For once, though, Americans are not part of the usual suspects (the Germans are).

Anyway, what we know is that the European Central Bank's plan has Greece coming out of recession sometime around 2015 -- and the ECB plans have been consistently and incorrectly optimistic to date.  Strangely enough, the Greeks aren't thrilled with a plan that will include 5+ years of recession on top of the recession they've seen so far.  However, nobody has a particularly good idea of what would be better.

We've seen a few signs of the stress -- although normally most of the sites would be on 'Summer Hours' by now, with two shifts that would mean they were open from 8:00am-8:00pm, in fact nearly every site (i.e., not the Parthenon and other World Heritage Sites) is only open until 3:00pm, so they only require one shift, and even then, they try to close early.  It's not clear this really saves any money since it drives the tourists away, but since we're talking about government planning here, you can't expect rationality.  Tourism is a major economic source for Greece, and yet many of the hotels are nearly empty.  You can seriously negotiate your room rate on a walk in basis, which have been ranging from 50-80 euros per night depending on where we've been outside Athens, and that includes breakfast, wifi and a minifridge.  Food has also been excellent and inexpensive, with most meals averaging about 6-8 euros for something like osso buco or beef kebabs enough for two, even at the touristy restaurants.  Souvlaki costs less than 2 euros!  A half litre (or half a kilo) of house wine is about 4 euros.

I did note an ad in Athens that seemed to be suggesting Greek banks are paying 5.55% on deposits, although I couldn't read the details and so don't know what the terms were.  No bank in the US is going to give you more than about 1% on any terms whatsoever, though, so clearly there's a pretty significant risk premium there.

For the US tourist, Greece is definitely the place to come.  They like Americans, practically everyone speaks enough English to handle basic transactions and usually much more, and it must be one of the cheapest countries in Europe as far as hotel and restaurant costs (at least outside Athens).  And as Lauren reminds me, you get the VAT back on goods you take out of the country, so apparently, the shopping is pretty good too.