Greek farm protests are a sign of Europe's inflation anxiety

Economists, farmers and charity workers agree about a cost-of-living crisis in Europe: Inflation may ease later this year but the impact of the spike in food and energy prices will last

Europe Food Prices (Copyright 2022 The Associated Press. All rights reserved)

In Greece’s rural heartland, tractors have become a symbol of anxiety.

For weeks, they have been parked along the country’s highways, their owners threatening to block traffic. Farmers are desperate for additional financial aid to cope with surging energy prices that are pushing up their costs for fuel and fertilizer, posing a sudden threat to their livelihoods.

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

The spike in energy prices and its ripple effects, he says, touch every part of his vineyard and peach grove business — it costs more for gasoline needed for farming machinery, electricity to power irrigation pumps and weed killer.

“At these (prices), we’re headed for ruin,” he said.

The sting of high energy prices — which are driving decades-high inflation numbers — is being felt across Europe and around the world, piling financial stress on governments, businesses and households. Countries are scrambling to address expensive utility bills and rising prices for food as farmers and supermarkets pass along their costs to customers, many of whom are facing a cost-of-living crisis.

Police in Turkey have been ordered to inspect grocery stores to ensure a new sales tax cut on food is implemented, with President Recep Tayyip Erdogan promising “severe punishment” for those who defy the measure. For some in agriculture, they're having to eat the extra costs: Egg producers in France recently pelted windows at the headquarters of a major supermarket chain to demand higher retail prices as energy costs take a toll.

In Greece, inflation is at a 25-year high and price increases for many basic food items are in double digits: Vegetables are up more than 14% from a year ago, olive oil is up by over 15% and certain types of meat are more than 17% higher.

At a neighborhood grocery store in Athens’ central Petralona district, shoppers picking up a few items say they now take 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 your monthly shopping at the grocery store and the farmers' market,” said Antonia Kalantzi, a 38-year-old personal trainer. “Things are quite difficult compared to what I remember from two years ago. Prices have gone up a lot.”

Farmers are feeling the same pain as they try to stay afloat. They're pressuring the government to provide additional aid on their electricity bills, cut sales taxes for fuel and other demands.

Kakalis divides his time between his farm and a nearby roadside protest outside Tyrnavos, a town 380 kilometers (235 miles) north of Athens. Protesters haven’t decided when — or if — they will block traffic across Greece.

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

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

Like many other European Union nations, Greece has rushed through subsidies, tax cuts and other temporary measures to help households pay electricity bills. But the prospects for longer-term aid are not clear. The EU has promised to reintroduce strict government budget rules next year after allowing emergency spending during the COVID-19 pandemic.

Darvas is optimistic that prices will settle eventually this year. But the pain to lower-income households is likely to last much longer.

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

“The richest 20%, though, spends just around one-third of that. So clearly, the huge price increases in energy and food across the European Union is mostly impacting poorer people,” Darvas said.

Charity groups say the effects of the pandemic and the cost-of-living crisis are clear, with some people increasingly desperate even as the broader economy grows.

“The gap between the have-nots 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 that is affiliated with the Greek Orthodox Church.

He says the charity distributes 7,000 food boxes a month to needy families in Athens, compared with 2,500 in 2019. The daily number of meals handed out, around 20,000, has risen fourfold.

“It is good of course that unemployment is dropping and that we have growth,” Dimtsas said. “But we see a section of society that doesn’t always show up straight away in official statistics. It is growing, and it has us very worried.”

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Gatopoulos reported from Athens. Associated Press journalists Lefteris Pitarakis in Athens, Zeynep Bilginsoy in Istanbul, Sylvie Corbet in Paris, Kirsten Grieshaber in Berlin and AP staff from around Europe contributed.

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