02.01.12

Greece’s Homelessness Spike

The debt-strapped country is experiencing a terrible byproduct of the economic crisis: a growing number of people living on the streets.

Until recently, homelessness was a foreign concept in Greece. It was something that Greeks discussed after visiting other European cities, where they were shocked by the sight of people sleeping in the streets. Since the economic crisis struck in 2009, however, Athenians have become far more used to the sight of fellow urbanites living on the sidewalks.

It is impossible to step out of a metro station, bar, restaurant, or cinema in the city center and not come across a homeless person. Sleeping in doorways, on welcome mats and over subway grates, these people are now one of the most visible symbols of Greece’s perilous economic situation. A nongovernmental organization estimates that there has been a 25 percent increase in Greece’s homeless population since 2009. More than half of these 20,000 are on the streets of Athens.

Temperatures are expected to drop below freezing over the next few days, with gale-force winds whistling through Athens’s narrow streets, in what is due to be the coldest week of the winter thus far. Authorities are struggling to provide blankets, medicine and food to the unsheltered exposed to these nasty conditions.

One government minister has referred to them as the “new homeless.” They are not on the streets due to drugs or drink, but because they have lost their jobs and homes as a result of the crisis and three full years of recession, accompanied by tough austerity measures designed to get Greece’s public finances back on track.

“The situation is extremely difficult,” says Giorgos Apostolopoulos, head of the municipal homeless shelter. “We are trying our best to find everyone we can, but sometimes people are hidden in parks or playgrounds. After that, it’s in the hands of the gods. If the weather gets worse, we’ll have serious problems.”

The City of Athens has set up a hotline so residents can tell authorities where homeless people are sleeping and dispatch the municipality’s mobile unit. With the help of volunteers, the city can then provide shelter at an indoor basketball court. There are no beds or heating—only sleeping bags on a wooden floor—but that beats spending the night in the freezing cold.

“The public’s response has been moving,” says Apostolopoulos. “They’ve been calling us and providing lots of blankets. What we’re short of now is food. We need to feed these people.”

No legislation exists to set aside public funds for people who have lose their homes, a sign of how unfamiliar a problem homelessness is in Greece. The European Union and the International Monetary Fund, which are providing loans to stave off Greek bankruptcy, are pressuring Greece to reduce public spending and bring down the country’s budget deficit, which was close to 10 percent of GDP last year. However, charities and Greece’s Orthodox Church do not have the resources to help the growing number of homeless. In response, the government plans to submit a draft law to Parliament in February that would allow it to provide financial assistance.

No legislation exists to set aside public funds for people who have lose their homes, a sign of how unfamiliar a problem homelessness is in Greece.

While the number of people sleeping in the streets is a visible reminder of the crisis, there is a looming problem for Greece that is less obvious. With unemployment edging towards 20 percent, wages being cut and taxes—especially on property—increasing, many Greeks are on the verge of losing their homes. A survey conducted for the Hellenic Property Federation (POMIDA) indicates that 48.2 percent of homeowners are unlikely to be able to meet their mortgage payments this year. The same opinion poll, which POMIDA presented last weekend, suggested that 50.8 percent of homeowners do not think they will be able to pay their property taxes.

“This is a very representative poll. In fact, I think things might be worse,” says POMIDA president Stratos Paradias, who argues that the Greek government has “criminalized” home ownership by burdening property owners with taxes they cannot pay.

Banks have in general been unwilling to foreclose on homes due to the difficulties they face in selling the properties on the open market. Instead, they are seeking to restructure mortgages in a way that makes payments low enough for customers to be able to pay. But this respite might come to an end. For many, it already has, as owners walk away from underwater property whose payments they cannot make, or lose housing to landlords who can no longer tolerate rent months in arrears.

“There have been few repossessions so far but that’s because people are getting help from relatives,” says Paradias. He points out that in the current economic climate, putting a house on the market is futile, as few sellers are going to find buyers. The figures support his argument. The Bank of Greece data shows that house sales dropped by about 20 percent last year alone. The number of new construction permits issued in 2011 was also down by about a third.

Nikos Vassiliou, a 39-year-old father of two who is paying off a two-bedroom apartment he bought in Athens, has been deeply affected by this decline in construction activity. He usually works on building sites but has found jobs only intermittently since last year. Construction is one of many sectors of the Greek economy suffering from the deep recession. The lack of income has put great pressure on the Vassiliou family’s finances.

“We’ve cut back on everything and are hoping that there will be enough work this year to cover our costs,” he says. His wife had a part-time job as a cleaner at a bank but it was scrapped as a result of cutbacks.“At the moment, we are able to pay our mortgage because we had some money saved,” says Vassiliou, who has taken to planting vegetables in his apartment block’s communal garden to save money on food.

For Vassiliou, there is a fallback position if the bank repossesses his home: his in-laws live a few hundred yards away. Family ties are still very strong in Greece and are one reason why homelessness is not even more pronounced.

“Knowing my wife’s family is there is some comfort,” Vassiliou says. “We are lucky. There are thousands of others who are in a worse position than us. I don’t want to imagine what will happen to them.”

The homeless scattered around the streets of central Athens are a wake-up call to how quickly members of society can slip through the cracks created by the crisis. The challenge the country faces is how to revive its economy so that people like Vassiliou and his family are not the next to slide into desperation. All while Greece remains under constant fiscal pressure from the EU and the IMF.