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Christmas bleak in southern Europe

A couple passes by a shop offering up to 50 per cent discount in Palma de Mallorca, on the Spanish Balearic islands. Photo: Reuters

A couple passes by a shop offering up to 50 per cent discount in Palma de Mallorca, on the Spanish Balearic islands. Photo: Reuters

Christmas is bleak this year across southern Europe, the area worst hit by the eurozone debt crisis, with many families struggling to provide even a small celebration for their children.

We cannot afford to have the heating on so we will sit at home covered in blankets

From Lisbon to Athens, Christmas lights are dim, gift purchases are down and suffering families are bitter at the effect of three years of crisis.

Conditions are worst in Greece, the country which sparked the debt crisis in early 2010 and has had to swallow sweeping tax rises and spending cuts in exchange for international aid.

“It will be difficult. We cannot afford to have the heating on so we will sit at home covered in blankets,” said unemployed computer salesman Polihronis Sotiriou, 46, whose family is now struggling on the salary of his teacher wife.

“Of course we will have a family dinner but we sure won’t be eating meat this year,” he said. Comparing it to Nazi rule in World War II, he added: “I know from my parents who lived through the occupation that this year is as bad as it was then – if not worse.”

Feelings are similar in Portugal, which like Greece is kept afloat by an international bailout and is mired in its worst recession for 40 years.

“If we exchange gifts this year at all, it will be something very cheap, probably bare necessities,” said Agneia de Sothe, a 48-year-old cleaning lady in Lisbon.

Italy, the eurozone’s third biggest economy, has rattled investors’ nerves because of a political crisis and uncertainty about the outcome of an election expected in February.

But steep tax rises and spending cuts by technocrat Prime Minister Mario Monti have already caused great pain, with the latest instalment of a hated property levy swallowing savings just before Christmas.

“I am buying no gifts this year. None, except for the children. Last year I bought presents for everyone, friends and family,” said civil servant Nadia di Santo, 38, in a shopping district in northern Rome.

“I have put up the tree, although I am using the same decorations as last year. I will sort something out for Christmas dinner.”

Nearby, Marisa Pines, the owner of a women’s accessories shop, shook with anxiety as she said her takings were way down. “I have had this shop for 24 years,” she said. “This is the worst I have ever seen.”

Things are bad too in Spain, the zone’s fourth biggest economy, which is widely expected to be the next to take a bailout. Here, though, strong family networks and traditions of Christian giving are pushing many people to buy gifts despite their straitened circumstances.

Barcelona business school ESADE said the average Spanish family will spend €650 on all Christmas spending – more than households in many richer European countries to the north. But that figure is still 40 per cent lower than in 2007.

At accountancy firm Deloitte, which carries out an annual Christmas consumption survey, Victoria Larroy said: “There has been a big drop in Christmas spending, but tradition also matters. Spain is still the fifth highest-spending country in Europe and that is for cultural reasons.

“At both ends of the scale people are motivated by the same thing,” said Larroy. “Those who plan to spend more say that next year is going to be so hard they want to enjoy themselves a bit and forget about those day-to-day worries.

“And those who don’t want to spend say it is because they can’t forget about the crisis.”

ESADE marketing professor Jaime Castello said 25 per cent of Spanish consumers, those worst hit by a crisis that has put one in four workers out of a job, would spend less than half the national average on Christmas gifts and entertainment.

“For this group, the most important thing is buying nice food and giving presents to the children. They will cut out everything else and won’t eat out with friends,” he said.

“Everything will be focused on the household.”

The signs of a frugal Christmas are obvious on Madrid’s streets, where shops are unusually quiet and decorations have been reduced.

“We were selling three times as much this time last year,” said Jesus Cerelo, 30, a butcher at a neighbourhood market in a residential district of the Spanish capital called Prosperidad.

“You really notice that there are fewer people,” said Antonio Perez, 46, who sells seafood at the market, where many of the stalls have closed down and the hall is dark and quiet.

Vassilis Korkidis, head of Greece’s ESEE retail federation expected people there to spend €15-20 on average on gifts, compared to €40 last year.

“Family is very important to us Greeks so the worst thing is when you are not able to provide for them,” said 70-year-old pensioner Nikos Tsakos. Two of his three children, in their 30s and 40s, are out of work and he has two small granddaughters.

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