With all the contraction in the Greek economy, with employees laid off en masse and one in four small businesses forced to close, it might seem odd that new shops are springing up like mushrooms in Athens and other cities.
But the stores ? pawnshops and gold dealers ? are thriving as Greeks who are short of cash give up jewellery and other valuables to make ends meet and pay new taxes. The authorities reported a veritable explosion in the sector, with 90% of the nation?s 224 officially registered pawnshops having opened in the past year.
While these entrepreneurs insist that their services are legitimate, the Greek authorities contend that many of the shops are concealing a rapidly expanding illicit trade in gold, and that much of it is being smuggled out of the debt-racked country, confounding efforts to curb rampant tax evasion.
Similar trends have been reported in other countries that were hit by recession. In the US and Britain, weakening economies and turmoil in credit markets have helped gold dealers thrive. A decade ago, the same happened in Argentina, after its economic meltdown.
In Greece, new outlets are springing up on streets where bankrupt stores have been boarded up. Competing with old-school pawnbrokers who work out of tiny stores on side streets, the new professionals lease central locations, taking advantage of falling rents. They advertise in newspapers and on television, and
slip promotional leaflets under doors and on car windshields. Many also accept cars, yachts and real estate from Greeks no longer able to finance affluent lifestyles.
Many jewellers have joined in, putting placards in their windows reading ?I buy gold.? And there are signs of foreign interest. One Italian jewellery wholesaler, which has opened several franchises in Greece, accepts gold teeth as well as jewellery in exchange for cash.
Although most traders are reluctant to talk, those who do say they are just seizing an opportunity created by hard times and the high price of gold, roughly $1,600 an ounce.
?Gold is strong ? so there?s a lot of interest in selling,? said Yiannis Spiratos, manager of a pawnshop in central Athens. ?We?re just serving that interest.?
He said that 8 in 10 customers sold their goods outright, rather than pawning them. ?Some sell their jewellery because they never wear it; many say they need the money to pay emergency tax,? he said, referring to a new tax on property owners.
Outside his shop, a smartly dressed middle-aged woman said she had just sold some earrings and her husband?s gold watch. ?He couldn?t do it; he was too embarrassed,? said the woman, who gave her name only as Anna. She said she had made around $1,500 from the sale, after visiting four other shops for quotes.
With an increasing number of Greeks considering cashing in their jewellery or family heirlooms, the country?s consumer protection agency recently published guidelines to protect people from unscrupulous dealers. It warns against traders promising particularly high prices and advises consumers to weigh their jewelry at home or to have it assayed at a laboratory run by the national association of goldsmiths. The warning followed a government order for stricter inspections of gold dealers to ensure they are licensed and operating legally.
?The crisis is an opportunity for many, and that?s OK. as long as it?s legal,? said Nikos Lekkas, the head of inspections at the Financial and Economic Crime Unit of the ministry of finance.
But although most gold dealers obtain the required operating license from the police, few keep a log of their transactions, as the law dictates. Inspections of pawnshops and gold dealers in Athens indicated that 80% were guilty of tax evasion, depriving the government of millions, and possibly billions, of euros in lost revenue, according to the financial crime unit.