Greek farm protests are a sign of inflationary anxiety in Europe

Farmer Dimitris Kakalis, 25, fills a water tank in the central Greek town of Tyrnavos on Sunday February 13. Economists, farmers and charity workers agree on a crisis in the cost of living in Europe: inflation may ease later this year, but the impact of soaring food prices and the energy will last. [Giannis Papanikos/AP]

TYRNAVOS – In the rural heartland of Greece, tractors have become a symbol of anxiety.

For weeks, they have been parked along highways across the country, their owners threatening to block traffic. Farmers desperately need additional financial assistance to cope with soaring energy prices that are driving up their fuel and fertilizer costs, posing a sudden threat to their livelihoods.

“Take the fertilizer: last year we were paying 500 euros ($570) per ton. Now it’s like buying land. It’s 1,700 to 1,800 euros,” said Dimitris Kakalis, a 25-year-old farmer from central Greece who joined the protests.

Soaring energy prices and its ripple effects, he says, are affecting every aspect of his winery and fisheries business – it costs more for gasoline to power farm machinery, electricity to power irrigation pumps and weed killer.

“To these [prices]we are going to ruin,” he said.

The sting of high energy prices – which have driven high inflation figures for decades – is being felt across Europe and around the world, adding to the financial strain on governments, businesses and households. Countries are scrambling to cope with expensive utility bills and rising food prices as farmers and supermarkets pass their costs on to customers, many of whom are facing a cost of living crisis.

Turkish police have been ordered to inspect grocery stores to ensure that a new food sales tax cut is implemented, with President Recep Tayyip Erdogan promising ‘tough penalties’ for those who defy measure. For some in agriculture, they have to bear the extra costs: egg farmers in France recently bombarded the windows of the headquarters of a major supermarket chain to demand higher retail prices as energy costs weigh heavily .

In Greece, inflation is at its highest level in 25 years and price increases for many food staples are in double digits: vegetables are up more than 14% from a year ago, olive oil is up over 15% and some types of meat are up over 17%.

At a neighborhood grocery store in Athens’ central Petralona district, shoppers who pick up a few items say they now carry a 20 euro note with them instead of the 10 they needed last year.

“You have to cut some things [out] to be able to manage his monthly groceries and the farmer’s market,” explains Antonia Kalantzi, a 38-year-old sports coach. “Things are quite difficult compared to what I remember two years ago. The prices have gone up a lot. »

Farmers feel the same pain as they try to stay afloat. They are lobbying the government to provide additional help on their electric bills, lower fuel sales taxes and other demands.

Kakalis splits his time between his farm and a roadside protest near Tyrnavos, a town 380 kilometers (235 miles) north of Athens. Protesters have not decided when – or if – they will block traffic through Greece.

Kakalis stands in a circle with other men, warming his hands by burning scrap wood, the discussion focusing on the long-term effects that rising energy prices are likely to have.

“Unfortunately, we cannot rule out the scenario that food and energy prices will be permanently higher, which means that, you know, it’s not just a shock this year, but also in years to come,” said Zsolt Darvas, an economist and senior fellow at Brussels think tank Bruegel.

Like many other countries in the European Union, Greece has rushed to provide subsidies, tax cuts and other temporary measures to help households pay their electricity bills. But the prospects for longer-term aid are unclear. The EU has promised to reintroduce tough government budget rules next year after allowing emergency spending during the Covid-19 pandemic.

Darvas is optimistic that prices will eventually stabilize this year. But the pain for low-income households is expected to last much longer.

“The poorest 20% of the population spend much, much more on energy and food. They basically spend two-thirds of their budget on housekeeping [bills] and food,” the economist said.

“The top 20%, however, spend about a third of that. It is therefore clear that the huge increases in energy and food prices in the European Union mainly affect the poorest people,” said Darvas.

Charity groups say the effects of the pandemic and the cost of living crisis are clear, with some people growing increasingly desperate even as the wider economy expands.

“The gap between the poor and the rest of society is widening, and what we are seeing is shocking,” said Constantine Dimtsas, director of Apostoli, the country’s largest charity affiliated with the Greek Orthodox Church.

He says the association distributes 7,000 boxes of food per month to needy families in Athens, up from 2,500 in 2019. The daily number of meals distributed, around 20,000, has quadrupled.

“It’s of course that unemployment goes down and we have growth,” Dimtsas said. “But we see a part of society that doesn’t always show up in official statistics. He is growing and worries us a lot. [AP]

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