Greeks were poorer, prices remained high in 2017

Though Greece slipped to 24th place on the list of the wealthiest countries in the European Union in 2017 from 14th a decade ago, it remains the 19th dearest state in the bloc, data from a Eurostat report on prices for consumer goods and services showed on Friday.

In 2007, two years before the country plunged into its eight-year-long economic crisis, Greece’s real gross domestic product (GDP) per capita stood at 95.1 percent of the EU average; by 2017 it had plunged to 69.7 percent.

However, the prices of goods and services did not follow the downward trend. Last year, these stood at 82.2 percent of the EU average, while in the important food and non-alcoholic beverages, Greek prices were 3.4 percent higher than the EU average, ranking it 13th in the category, above Portugal and Spain.

Greece’s predicament can be explained by the fact that competition does not work in several sectors, but also by the high indirect and special consumption taxes slapped on food.

In the category of alcoholic beverages and tobacco, Greece was the 12th most expensive country among the EU’s 28 last year, lower than the EU average but with a small 5.5 percent deviation.

The alcohol and tobacco sector was targeted by consecutive Greek governments, which imposed special consumption taxes during the eight years of adjustment programs to increase revenues.

But the sector where prices in Greece topped all EU member-states is communications – including telephone and postal services, and  equipment – where the country exceeded the EU average by 54 percent.

On the other hand, the country was cheaper in housing and education, with prices last year remaining below the EU average with 36.9 percent and 35.8 percent respectively.

With regard to housing, Eurostat figures present half the picture, as the data does not include other financial burdens such as the unified property tax (ENFIA).

For the Greek economy to converge with the EU-28 over the next 10, 15 and 20 years, its real GDP per capita will have to expand at a rate of 3.2, 2.1 and 1.6 percentage points higher, respectively, than that of the bloc’s, Eurobank said in its weekly bulletin.