For the first time since the country was occupied by Nazi Germany, Greece’s national economy has deteriorated so dramatically that now average citizens are forced to barter with goods and services for their daily needs.
‘It’s a Nightmare’, say’s a 41-year old farmer that is forced to pay his employees with a portion of his clover crop. “I owe many people money now – gas stations and firms that service machinery. I have to go to the bank every single day, and the money I can take out is not enough,” said Tsakanikas, who also grows vegetables on about 150 acres.
Natural News Reports:
(NaturalNews) Greece’s finances and its national economy have both deteriorated so dramatically that now average citizens are being forced to do something they haven’t had to do since the country was occupied by Nazi Germany: Barter for their basic needs and essentials.
As reported by Reuters, the rise in bartering comes amid a government-imposed cash squeeze stemming from an Athens-imposed three-week closure of the country’s banks on June 28. Since then government capital controls, put in place to avoid a run on banks, have limited the supply of cash in the hands of ordinary Greeks.
Reuters further reported:
Wild boar and power cuts were Greek cotton farmer Mimis Tsakanikas’ biggest worries until a bank shutdown last month left him stranded without cash to pay suppliers, and his customers without money to pay him.
Squeezed on all sides, the 41-year-old farmer began informal bartering to get around the cash crunch. He now pays some of his workers in kind with his clover crop and exchanges equipment with other farmers instead of buying or renting machinery.
‘It’s a nightmare’
Tsakanikas has become part of an expanding barter economy that many Greeks abhor because they see it as a step back from modern life, Reuters continued. However, many others are embracing it as a means to an end: Short-term economic survival.
When Tsakanikas rented a field in early August, he agreed he would pay for it with a portion of his clover crop.
“It’s a nightmare. I owe many people money now – gas stations and firms that service machinery. I have to go to the bank every single day, and the money I can take out is not enough,” said Tsakanikas, who also grows vegetables on about 150 acres.
“I’ve begun bartering in some forms – it existed in the past but now it is growing… Times have become really tough, and friends and relatives help each other out,” he added, according to Reuters.
A growing number of Greek citizens are being forced into the barter economy, especially those living in rural areas, swapping goods and services in cashless transactions. The capital controls were put in place by the government of socialist Prime Minister Alexis Tsipras just a few days before Greece became the first advanced economy to default on a loan from the International Monetary Fund. That forced Athens to request a third financial bailout, which was humiliating for many in the country.
And while capital controls are being eased a bit, Greeks can still only withdraw 420 euros a week from their bank accounts.
It’s hard to estimate just how much of Greece’s economy is now based on the barter system because so much of it is informal. However, anecdotal evidence indicates that barter is surging.
Indeed, many saw this coming.
Zero Hedge noted in a recent blog post that the site predicted in February that Greece’s economic conditions would deteriorate to the point where, quoting Credit Suisse, the country would be “digitally bombed back to barter status.”
Greece was in a perilous economic position anyway, but it became worse as negotiations for a new bailout deal – something Greece wanted but the IMF did not – dragged on. For every day without a deal, nearly 60 businesses closed, 613 Greeks lost full time jobs and the Greek economy lost 22 million euros.
But the debt crisis was really one of Tsipras’ making. He, along with his fellow Syriza party members, rode to power on a promise of ending punishing austerity policies that were part of the original IMF and European Central Bank bailout agreement, but which were increasingly unpopular with the Greek public. Trouble is, the austerity was necessary because the Greek government was paying out more in public welfare than it was taking in as a result of taxes and other revenues.
As the economy has tanked and barter has become increasingly common – something that could happen in a collapsed U.S. economy – Greece has suffered a brain drain: While entrepreneurship and retail sales have fallen 70 percent, some 7,500 doctors have left the country since 2010.
UPDATE: Greece’s bad economic news just keeps getting worse. In recent days, the Greek stock market Greek bank shares fell dramatically, dragging down the broader Greek stock market.