Planet Money
2:41 pm
Fri March 21, 2014

'The Numbers Are Getting Better, The People Are Getting Worse'

Originally published on Thu March 27, 2014 6:39 am

When we talked to Katerina Margaritou two years ago, she was worried about how she would pay for her wedding dress. She was working for the government as a chemist, but hadn't received a paycheck in months.

Katerina was starting to lose faith in her country, starting to think she and her fiancee, Elias Tilligadas, would be better off leaving Greece.

The Greek economy has continued to shrink since we last talked to Katerina. But this year the Greek government and the IMF are predicting the economy will finally turn around. So I called Elias and Katerina again this week to see how they were feeling.

Elias and Katerina didn't wind up leaving Greece. Her paychecks started coming again, and she got back pay for the time when the checks stopped.

The Greek government is starting to fix some of its fundamental problems, says Nicholas Economides, a professor at NYU. To crack down on tax evasion, the government now puts property tax on power bills. So if people don't pay the tax, the power gets cut off.

The government is also cutting expenses. Katerina's government salary was cut by 30 percent. Elias, who works as a government food inspector, had his salary cut by 45 percent.

The couple, not surprisingly, is underwhelmed by the prediction that the Greek economy will start growing again this year.

"The numbers are getting better; the people are getting worse," Elias says. "Our lives are getting worse."

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Transcript

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Imagine if, after the financial crisis, the U.S. economy had continued to sink year after year. That's what's been happening in Greece. Every year the Greek government releases its numbers, and every year the news is bad. The economy shrinks, and people lose jobs. But that may be at an end. Official forecasts predict this will be the year the Greek economy finally turns around. Here's David Kestenbaum from NPR's Planet Money team.

DAVID KESTENBAUM, BYLINE: We at Planet Money have been following this Greek couple who live in Athens throughout this whole mess, Katerina Margaritou and Elias Tilligadas. They have the kind of sense of humor that can get you through a lot of things, but when we spoke two years ago, living in a constantly shrinking economy was taking its toll. Katerina's job had stopped paying her, but she was still going to work day after day. What else was there to do?

KATERINA MARGARITOU: They don't pay us because they have no money.

KESTENBAUM: She was sure the checks would come eventually; her husband, no.

ELIAS TILLIGADAS: No.

MARGARITOU: Yes. I'm sure.

KESTENBAUM: Elias, who worked as a safety inspector, was contemplating learning to farm so they could grow their own food. Katerina was ready to give up everything.

MARGARITOU: Actually I want to leave Greece, to leave from here, from Greece.

TILLIGADAS: No, I'm not going to leave Greece for the second time.

MARGARITOU: I'd like to leave because we have no future here. I...

TILLIGADAS: No, no, no, no. If I leave now, there would be nobody else left behind to save this country.

KESTENBAUM: I called Elias and Katerina again this week. They had not left Greece, and that thing Elias said would not happen, it happened. Katerina started getting paychecks again.

MARGARITOU: I have my job. I'm getting paid every month.

KESTENBAUM: Have you gotten all your back pay?

MARGARITOU: Yes, yes. They don't owe me anything.

KESTENBAUM: Katerina works as a chemist for the government, and the government has finally balanced its budget. The Greek government is predicting this will be the year the economy starts to turn around. The International Monetary Fund has a similar forecast, and so does Nicholas Economides, a professor at NYU.

NICHOLAS ECONOMIDES: I'm very optimistic that the Greek economy will expand this year. We're just not sure how big this expansion is going to be, if it's going to be .5 percent, 1 percent, 1.5 percent.

KESTENBAUM: Small steps. The Greek economy has a lot of ground to make up. Since the financial crisis, the economy has shrunk by something like 25 percent. And the Greek government still has huge bailout loans to repay. But Economides is optimistic about the Greek economy because the government is slowly fixing some fundamental problems though not always in the most graceful of ways.

Tax evasion, for instance, has always been a problem in Greece. So the government came up with an unusual way to collect some revenue - it tacked a property tax onto people's electricity bills. Don't pay, your power could get cut off, clever and hugely unpopular.

ECONOMIDES: But it does provide enough revenue for the government to keep going.

KESTENBAUM: The unemployment rate in Greece is over 25 percent. And for that to improve, someone is going to have to start hiring. Businesses in Greece will have to take a risk, borrow money and expand, or foreign companies will have to come in and open up shop. One selling point for Greece is that, as economists would put it, labor is cheap. With the economic implosion, salaries have dropped. Katerina and Elias, remember, both work for the government. One of the ways the government balanced its budget is by cutting their pay and not by a little.

TILLIGADAS: Forty-five percent.

KESTENBAUM: Your salary was cut 45 percent?

TILLIGADAS: Yeah.

KESTENBAUM: Katerina?

MARGARITOU: Mine only 30 percent. I was very lucky.

KESTENBAUM: What do Katerina and Elias think of those forecasts that the economy could turn around this year?

MARGARITOU: I want to answer to this, ha, ha, ha, ha, ha. That's my answer.

(LAUGHTER)

MARGARITOU: It's funny. It's a joke.

(LAUGHTER)

TILLIGADAS: The numbers are getting better; the people are getting worse. Our lives are getting worse.

KESTENBAUM: When you're inside a big, complex thing like an economy, it can be hard to feel its overall trajectory. But even if the forecasts are right, it could be a while before things actually feel better. A good news headline for a year from now would be: Greek economy finally stops shrinking. David Kestenbaum, NPR News.

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This is NPR News. Transcript provided by NPR, Copyright NPR.