Greek crisis: It's still a life of luxury brands

Greece may be facing years of austerity—even after securing the biggest sovereign debt restructuring in history last week—but take a 20-minute cab ride north of central Athens to the suburb of Kifissia, and it is hard to find many visible signs that the programme of spending cuts is starting to bite.

“One group of society has not really been affected by the crisis—the very rich,” says Theo Bosdas, managing director of a branch of a German estate agent on one of Kifissia’s main streets, who has properties for sale for more than €8-million. “This is where they live, so it’s much better than downtown. This is very, very Chelsea.”

Other locals describe the suburb and neighbouring Ekali to the north of Athens, which count former prime minister George Papandreou and opposition leader Antonis Samaras among their residents, as similar to South Kensington, Knightsbridge or Notting Hill.
And Kifissia does have a very similar feel to those areas, with queues outside the city’s hippest nightspots in the evening and the clientele from coffee shops that charge close to €5 for a cappuccino spilling out on the pavements during the day.

The brands shouting out from shop windows are the same ones you would expect in West London, Paris’s Left Bank or Manhattan. Louis Vuitton, Gucci, Prada and Bottega Veneta handbags, Manolo Blanik shoes and Mac makeup can all be found.

Retail sales fell 30% in Greece over Christmas compared with the previous year. Antonis Megoulis, who heads the national confederation of Greek commerce, says: “It couldn’t be worse. Our monthly surveys are shocking reads. Sales are down, businesses are closing every day and there are no signs of optimism on the horizon.” About 65 000 shops have closed in the past three years and another 50 000 are said to be on the brink of bankruptcy.

But business is still brisk at the luxury stores in Kifissia, according to its shop assistants. “There is a crisis and you can feel it everywhere ... but Kifissia is better because people here are richer,” says Maria Douka, in the Gucci store. “Of course big brands like Gucci don’t have such a problem, but some family businesses are in trouble—almost everyday something is closing.”

‘Afraid to wear luxury bags’
She says some customers are still keen to buy but the growing inequality between rich and poor is making them more conscious about flaunting their wealth: “Some ladies say they are afraid to wear luxury bags and brands.”

It is similar story at Bottega Veneta down the street. “They don’t like to wear brands out,” says shop assistant Schoina Vaso. “They still buy, but not at the same levels as about five months ago, when we noticed a decline.”

Around the corner at the local Starbucks (there used to be two, but one recently closed) student Hanna Martetschla and her friends, all daughters of business executives, say nothing much has changed for the rich as long as they are careful in central Athens: “Downtown you should be low-profile—wear jogging pants. But here is not at all affected. There are no protests, no riots, no nothing, only [transport workers’] strikes.”

Evangelos Krielas (39) an engineer drinking a coffee and smoking a cigar outside the newly opened B-spoke bar, says Kifissia has largely escaped the crisis affecting the rest of Greece because most people from the area are too rich to notice. “Most people from Kifissia don’t work, they receive money every month from rent on the shops and houses they own,” he says.

Many Greeks with more modest incomes blame tax avoidance by the super-rich for helping create the crisis. “They don’t pay, that’s the problem. If the rich had paid we wouldn’t have had a problem,” says Angelisa Tserga, a student studying for a PhD in biology.

Niki Fidaki, a computer scientist, says: “The people who have the money are the ones who don’t pay. If I didn’t pay my taxes I would go to jail,” she says. “If I became rich I would find a way not to pay. At the moment it is the poorer who are paying for the rich, that’s the scandal.”

Bosdas says many of the richest Greeks have already left the country. “People who have things like that [multimillion-euro homes] left Greece years ago. They have businesses in England or wherever. They may still come back here, they may not. They are acting as they wish. They don’t care.”

He says the rich blame strong unions for creating a bloated public sector where jobs are guaranteed for life and sometimes even passed down through the generations. “We have about one million public servants in a population of 10-million. No one can fire these people unless they kill or steal. In the port their jobs are inherited.

“Blue-collar people blame white-collar people because their sons are entering Parliament [to help ensure favourable laws for their rich parents]. It is an exchange of favours. They are both wrong.”

He says very few sales go through because sellers are demanding unrealistic prices for their properties. A five-bedroom luxury mansion on the hills overlooking Kifissia, which has been on the market at €8-million for more than a year without attracting any offers, should be on the market for €4-million. “People prefer suicide rather than selling at a loss or breaking even.”

Any buyer who bought between 2007 and 2009 will be sitting on a massive loss, Bosdas says, but he reckons people who bought before the “ridiculous property boom” should be able to break even: “The problem is Greeks are too proud, they don’t want anyone to get a good deal, and buyers don’t want to be seen as vultures snapping stuff up.” -

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