Selling gold teeth to make ends meet in Greece
http://www.reuters.com/article/2011...c=401&feedType=RSS&feedName=bondsNews&rpc=401
Jun 30, 2011
Daniel Flynn
ATHENS, June 30 (Reuters) - A smartly dressed woman waits as a young man
behind a glass screen weighs her gold earrings, bracelets and rings and
counts out 1,600 euros.
"I'll see you again soon," she says, slipping the bills into her
purse. Behind her, a grey-haired man shuffles towards the counter. "Do
you buy gold teeth?" he asks.
In the Greek capital, gold is marking a divide between the "haves"
and a growing number of "have nots".
Shops like this one have mushroomed in downtown Athens and are doing
a brisk business. They offer cash for gold by weight and sell it to
foundries.
Many ordinary Greeks who prospered after the Mediterranean country entered
the euro a decade ago are now being forced to sell their family treasures
just to make ends meet.
With the worst recession since the 1970s grinding into its third year,
fresh belt-tightening measures to appease international lenders are
driving many middle-class Greeks to desperation.
Unemployment has climbed to more than 16 percent and real wages are
down by around a fifth since the global financial crisis struck three
years ago.
With average salaries less than 1,300 euros ($1,900) a month and inflation
running at more than 3 percent, many Greeks say they do not have enough
money to pay for the basics.
"A lady came to me the other day crying because she needed to sell her
gold jewels and didn't know what they were worth," said Alexandria
Verykokaki, 55, whose family has owned a jewellery shop in downtown
Athens since 1923.
"These are not poor folks. They are ordinary, middle-class Greeks: a
woman with three kids who needs to sell her wedding jewellery just to
send her kids to school."
GOLD RUSH FOR WEALTHY
That is one side of the coin. On the other, many wealthy Greeks, worried
by the political paralysis gripping their country, are pulling money
out of the bank and buying gold, regarded as the ultimate safe haven in
times of uncertainty.
Burnishing its appeal, the price of the precious metal has climbed to
record highs over the last year, driven in part by anxiety in financial
markets over Greece's prolonged agony which has prompted a flight to
stable assets.
Many international investors believe the eastern Mediterranean country,
which makes up just 2.5 percent of the euro zone economy, cannot hope to
service its enormous debt running at nearly 350 billion euros and rising.
Many in Greece appear to agree. Banks have lost around 8 percent of
their deposits this year, with outflows accelerating in May and June
as anxiety grew at the government's dwindling parliamentary support,
according to credit ratings agency Moody's.
Roughly half the fall was due to individuals and companies burning
through their savings to compensate for their lower income.
But the rest was due to wealthier Greeks, fearful of an impending
financial collapse should the country default, sending money abroad,
stashing it in safety deposit boxes, or buying gold coins, Moody's said.
"The people with money are no longer buying land, they are buying gold
and silver," said Verykokaki. "Greeks are ignorant. It's stupid because
if they take the money from the bank, the banks won't have enough to
go around."
With capital flight compounded by a increasing number of loans turning
bad, authorities have urged banks to explore merger possibilities to
cope with the crisis.
The flow of capital from banks could become a flood if the government
fails to implement the 28 billion euro austerity plan, demanded by the
European Union and the International Monetary Fund as a condition for
propping up its finances.
In a tight vote on Wednesday, parliament approved a law outlining tax
rises, spending cuts and the sale of state companies.
But Greece's privatisation process, which stalled when the Socialists
won power, may struggle to meet targets amid the political and economic
maelstrom. Greece needs to sell 5 billion euros in assets by December
to honour its commitments, but foreign investors may be wary faced with
militant unions.
"The prime minister talks about privatisation, tax reforms, social
reforms. He's talked about all that before," said political analyst
Costas Panagopoulos. "The question is will he use this vote to move
forward with these crucial reforms?"
Greece's debt is forecast to reach 1.6 times its economic output next
year -- bigger than Argentina's when the South American country stumbled
into a chaotic default in early 2002.
Many Greeks believe not only that it is not economically feasible, but
it is not morally acceptable to pay a debt racked up by the political
dynasties which have ruled the country for decades.
"I want to tear down the parliament building. We didn't waste all this
money, they did, and they are not going to jail," said Dimitris Avramidis,
34, a bookstore employee.
"I've done nothing wrong. I've never taken out a loan in my life. So why
should I pay now? I want people to take all their money out of the banks."