Greeks struggle with daily grind as foreigners head to beach

June 30, 2015 Facebook Twitter LinkedIn Google+ Economic News

June 30, 2015

ATHENS, Greece (AP) — Gamal Takaway has turned up the hustle, to no avail. The popular waiter who goes by the nickname Jimmy often steps out into the pedestrian street in front of the Taverna Plaka restaurant to cajole strollers into taking a table. But even his epic charm has failed since the Greek government shut the nation’s banks and imposed strict capital controls over the weekend.

“We are empty this afternoon,” he said Tuesday, looking at rows of tables with no diners. “It happened in one night, not slowly. This time it’s heavy. It’s dropped off by 50 percent.”

With cash withdrawals cut to 60 euros ($67) per day, many Greeks aren’t spending in restaurants for fear that they will run out of cash they would need if a family member got ill or another serious problem developed.

“You don’t know what can happen,” he said. “In my case, I have money, and I don’t have money in a sense. I have it in the bank, but I can’t get it in my hands. It’s crazy.”

On the streets of the Greek capital, resplendent in the early days of summer, there’s still a veneer of normalcy — at least for foreigners, who aren’t affected by the draconian rules imposed on Greeks. Sun-seeking tourists arrive by the planeload, airport currency changers hum along, and the big ferries pull out nightly from the nearby port of Piraeus bound for pleasure spots like Crete, Rhodes, and the quintessential party island, Mykonos.

But for locals, the miserly cash limit at ATMs means it will soon be a massive strain just to run a small business or keep a family going. And the drama is unfolding without a script, no safety net in sight. Beyond Greece, the fate of the vaunted, decades-old European project is in doubt with the approach of Sunday’s Greek referendum on the latest international bailout proposal — a de facto vote on whether or not to remain in the euro.

The capital controls are one in series of maneuvers by Greece’s radical left government — which came to power this year on a promise to break free of austerity programs — that has threatened the stability of the global financial system. Many fear that ruling Syriza party’s hard line on the bailout will force Greece out of the EU itself, and possibly lead to a contagion effect that would eventually unravel the union.

The controls are causing waves of anxiety at home as people try to figure out how to function without banks. Butcher stall owner Kleanthis Tsironis says he doesn’t know how much longer he can keep his 27 employees on board as sales plummet.

“I have no cash to pay for meat supplies for next week because of the capital controls,” said Tsironis, who started the business 51 years ago when he was a teen. “Sooner or later, probably in this month, I’ll have to let 10 people go. The people are buying with cash, not credit cards, and the problem is the customers don’t have cash.”

The government is still ironing out the details of the capital controls on what seems to be an ad hoc basis, adding to the confusion of daily life. It has made concessions to allow retirees without bank cards to withdraw a limited amount of cash from some banks, since it has become clear that many pensioners don’t have access to ATMs and have been completely cut off from their savings.

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