What a Depression Looks Like

On the eve of Ash Monday the group partook in carnival festivities in a small, family-owned restaurant in an otherwise quiet neighborhood of Nafplio. The owners opened just for us and were excessively gracious hosts. We feasted on lamb, pork, lagana (holiday bread), and more than several liters of wine. After dinner they brought out festive hats, wigs, and lots of streamers. They played for us traditional Greek music and gave us lessons in Greek dance. They did not sit idly in the wings, but they dined and danced among us. For €15 per person, we were part of a Greek family tradition. None of us will forget this awesome experience, but it came, perhaps, as a result of the economic circumstances.

Greek Carnival


Similarly, yesterday I negotiated down €150 worth of merchandise to €100 all by agreeing to pay cash instead of credit to the owner of a lovely komboloi shop. Why would she agree to such a steep discount? The obvious answer – the one where I’m the yuppie American tourist who was ripped off even at €100 – is not likely the correct one (in this case only). No, the store owner was content receiving the €100 because this was still a profitable transaction for her, and my “discount” was essentially foregoing the value-added tax. The owner would likely under report, if report at all, the transaction to the tax authorities. I’ll add that after receiving incredible service from the store owner, she looked into my eyes, took my hand, and thanked me for visiting her home country and her store.


Tax evasion is one, though in my opinion the most significant, of many reasons that Greece continues to experience negative growth, persistent unemployment, and capital flight. The depression here is worse than the U.S. Great Depression of the 1930s by some measures. GDP has accumulated losses of 20 percent, unemployment is at 27 percent with the rate for youth at a staggering 55 percent, and investments are at crippling lows. This is what a depression looks like through the lens of an economist. But what about through the eyes of Grecians such as the store owners described above?

The excellent service and “crisis prices” are fundamental to struggling small businesses. There is also, of course, a darker side to this depression. Homelessness is pervasive, vendors are aggressive, and graffiti undermines the beauty of the city. I’ve not seen a protest thus far, but we’ve all seen pockets of unrest in the news. What’s more disturbing is the growing presence of a right-wing faction in Greek politics that is overtly racist and proud to be associated with a Nazi style.


After a few days of meeting local leaders, the strategy for long-term growth seems clear and more or less the consensus: Greece must privatize and reform to establish credibility in the global markets, which will in turn attract private investment. What is unclear is whether or not the people of Greece will have the patience to stomach the long-term nature of these reforms and whether or not the current government can retain control amidst rising social unrest.

Dyanna Salcedo ’14

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