Greece’s ‘desperate households’
ECB survey shows families are the safety net of people who have lost their jobs and seen savings vanish
Greek householdsgenerally own their home and have a car; they often have a house in the village their family hails from too. However, their bank accounts are shrinking, their loans are not being serviced as promptly as they used to be and their liquidity is close to zero. Unemployment is now changing the structure of households, resulting in young and old being forced to stay under the same roof.
These are the main features of Greek households during the economic crisis as recorded by the European Central Bank’s Household Finance and Consumption Survey, which covers the 2010-14 period and was presented in Greece yesterday in the weekly bulletin of the Hellenic Federation of Enterprises (SEV).
Under the title “Desperate Households,” the bulletin highlighted that families continue to provide a safety net; however, it showed that their stamina is also running low, as is that of the friend network. The rate of Greek households that said they could seek financial support from relatives and friends dropped to 36.5 percent in 2014 from 59.4 percent in 2009. The situation is certain to have deteriorated further in the last couple of years.
Few Greeks have the luxury of being able to save money: Just 13.5 percent of households said they added to savings on a regular basis, down from 21.9 percent five years earlier. This is by far the lowest rate in the European Union.
The index of liquidity as a ratio of disposable income was at just 2.8 percent in Greece, down from 4.9 percent five years earlier, and against a eurozone average of 16.7 percent.
There was a notable decline in the rate of heads of households who are self-employed (from 18.9 percent to 14.4 percent within five years) and those who are salary workers (from 1.0514 39.7 percent to 36.5 percent). In contrast, the rate of heads of households who were retired increased from 34.7 percent to 39.3 percent, and those who were out of work from 6.6 to 9.8 percent.
Another study by the Cologne Institute for Economic Research showed yesterday that Greece is top among European countries in terms of poverty growth, as the number of Greeks below the poverty line grew 40 percent from 2008 to 2015.