Recovery after restoring stability in Greek economy in the past 4 years this has gone hand in hand with the deterioration of the international situation. As a result, income increase due to growth and modest tax cuts is facing the launch the cost of living, after the pandemic and Russia’s invasion of Ukraine. Thus, it keeps the structural effects of years of economic fixation fresh.

In the period 2019-2022 in Greece, the number of employees increased by 13% and average monthly earnings increased by 12.4% (Ergani). However, these positive developments, indicating the recovery of the economy, like the spring after the crisis, are at a low level. In 2021, the average annual adjusted full-time wage in Greece was €15,879 compared to €33,500 in Europe. Therefore, based on the height salary, our country ranks 22nd among 26 EU countries. (Eurostat).

But they’re not the only ones wage. The standard of living in a country is measured and compared on the basis of GDP per capita at purchasing power parity. This takes into account the cost of living. Also explaining the massive exodus of qualified young professionals in previous years, the standard of living in Hellas registered a clear decline in the previous decade due to the crisis. Consequently, our country in 2021 was slightly below Croatia and Slovakia or slightly above Turkey and Bulgaria in terms of living standards – ranking 32nd out of 40 countries (Eurostat).

inflationary pressure with the energy crisis as a remedy, but also the spike in property prices driven by tourism and foreign demand, of the order of 40%-50% over the last 4 years, increases costs relative to income. Revealingly, housing costs, together with heating in Greece, account for 27% of the costs of employees earning up to €750 per month, a high percentage that declines as income increases (ELSTAT).

In 2021, our country ranks 32nd among 40 countries in terms of the standard of living of the population.

In Greece, it is estimated that 4 out of 10 households spend 40% of their income on basic necessities, clearly above the European average. With purchasing power in the EU recording an increase of 1.9% compared to previous years, Greece remains in 22nd place in the European rankings – the average consumer spending reaches 9,433 euros per year or 786 euros per month (EURES).

In this environment, it is quite positive that 63% of Greeks live in their own home. Only 10% live in a home for which they have taken out a mortgage, and 21.5% pay rent (OECD). In addition, the official sector does not take into account the volume of the shadow economy, which, according to estimates formulated from time to time, creates a “cushion”, which in total reaches up to 40 billion euros.

Faced with the high cost of living, workers are demanding higher wages. For their part, business is boldly demanding government cuts in non-wage spending so as not to lose competitiveness and boost revenues. So far, the government has announced further cuts in social security contributions ahead of a new four-year period – they fell by 4.4 percentage points – as well as a new increase in the minimum wage from 713 euros to 780 euros. In addition, a new salary of civil servants is being revised, for whom the abolition of the solidarity fee is also being promoted. At the same time, there are small wage increases for 2.5 million pensioners.

“Raising the minimum wage will inevitably lead to higher inflation. If inflation were temporary, a benefit policy would be appropriate as it would protect the most vulnerable and prevent wage increases that would fuel the price-wage spiral. However, after nearly two years of inflationary pressure, wage increases to protect living standards are inevitable. Especially if you take into account its significant retreat in previous years. Otherwise, there will be a further deterioration in the standard of living and a significant redistribution of income at the expense of the weakest, with all the consequences, ”stresses the economist“ K ”. Aristomeni Varoudakis, former Professor at the University of Strasbourg and Senior Executive Director of the World Bank and OECD.

Behind the high cost of living

Apart from any distortions in the workings of the domestic market, the main source of accuracy in Greece is structurally high taxation, which kept prices high even during a period of falling wages. In this sense, the expansion of structural reforms in product, service and network markets, on the one hand, and the reduction of non-wage spending, while reforming spending and taxes, qualify as key components of increasing purchasing power. And, of course, in the end, the strengthening of GDP per capita due to further convergence with the average European level of investment attraction.

In conclusion: the economy is recovering from years of recession and stagnation, public finances are under relative control despite the pressure of successive crises, and the country has entered the game of attracting foreign capital. However, the situation is unfavorable due to the inflationary wave, taxes and contributions remain high despite the benefits of recent years, and the creation of new dynamic enterprises with well-paid jobs remains in great demand, despite the decline in unemployment.

Numbers

In Greece, it is estimated that 4 out of 10 households spend 40% of their income on basic necessities, clearly above the European average. With purchasing power in the EU registering an increase of 1.9% compared to previous years, Greece remains in 22nd place.^V in the European ranking – the average amount of consumer spending reaches 9,433 euros per year or 786 euros per month (EURES).

– Basic expenses (electricity, heating, water supply, utility bills) for an 85 square meter apartment approximately 170.00 euros per month.
– Fee per minute of prepaid mobile communication is approximately 0.41 euros.
– Monthly internet connection 25.00 – 30.00 euros.
– Athens public transport ticket €1.20
– Taxi start €3.50 and €1.00 per kilometer.
– Unleaded gasoline approx. 2.50 euros/litre.
– A pack of imported cigarettes about €4.60
– Water 500 ml from the kiosk 0.50 €
– Milk from the supermarket per liter is about 1.20 euros.
– Wine from the supermarket 750ml about €6.00
– Half a kilo of bread €1.00
– Restaurant meals per person from €10.00
– Cappuccino from 2.50 euros
– Local beer 500ml from €4.00
– Drink at the bar from €6.00
– Hot dog from €0.90
– Barbecue from €2.50
Data source: European Commission.