It is hard to make the argument that Greece can begin an economic recovery if Greek citizens view their situations as hopeless. A new study by Gallup shows that an increasing number of Greeks say that they are “suffering” and not “thriving.” To the extent that consumer confidence is essential to ending a recession, the data is very bad news.
Gallup reports that the number of Greeks who say that they are suffering has “more than tripled to 24% in 2011, from 7% in 2007.” This is a level almost never seen among the mature economies. Gallup points out that the results of its Greek survey show “a reality uncommon in the developed world.”
The problem leaves Greece’s leaders with a conundrum. The government has vowed to its eurozone neighbors and the IMF that it will make unprecedented cuts to budget expenses. That would take a total of 100,000 people off of the nation’s payroll, many estimates show. The parliament also will need to raise taxes. Both actions are almost certainly regressive. One will increase unemployment and the other will undermine consumer spending. Greece’s GDP already has fallen at a rate of about 5% this year. Economists think that number will worsen as austerity becomes a greater tool to entice the EU and IMF to approve the next stage of a Greek bailout.
The Gallup results demonstrate the extent to which austerity guts the chance for a developed economy to recover from a sharp slowdown. That has been mentioned fairly often by economists. The Gallup poll shows that Greek citizens already may be beyond the point of no return, at least as far as they are not likely to recover from their pessimism in the foreseeable future.
Methodology: The 2011 results from Greece are based on face-to-face interviews with 1,000 adults, aged 15 and older, conducted April 14 to May 3, 2011. Results from other countries and years are based face-to-face interviews with approximately 1,000 adults per country, aged 15 and older, conducted throughout 2011 as part of Gallup’s ongoing global research.
Douglas A. McIntyre