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The Greek Banks Are Open Again, But The Sales Tax Just Went Up

RENEE MONTAGNE, HOST:

We've heard a lot about the austerity measures that have been imposed on Greece by its European creditors. The latest is a sharp rise in sales taxes on everything from food to restaurants to the tourism industry. As Joanna Kakissis reports, it's seen as a way to raise tax revenues in a country where tax evasion is rampant.

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JOANNA KAKISSIS, BYLINE: Kostas Giannakopoulos, a rumpled father of two teenagers, owns an eyeglass store that's struggling. He's always looking for deals at the local discount supermarket.

KOSTAS GIANNAKOPOULOS: (Speaking Greek).

KAKISSIS: He fills his basket with milk and a two-for-one special on the sliced bread his kids like for sandwiches. Then he checks out spaghetti and cooking oil, two items that will soon be 10 percent more expensive.

GIANNAKOPOULOS: (Speaking Greek).

KAKISSIS: "We were already counting our pennies before this," he says. "We always look out for sales because like other Greeks, we don't have much to spend. But we've got to eat, of course." Giannakopoulos says he expects the new sales tax hikes will increase his monthly grocery bill by the equivalent of about $50. The supermarket's manager, George Georgopoulos, expects the higher taxes to hurt sales. But he hopes special deals will continue to draw customers. He points to a bundled package of spaghetti.

GEORGE GEORGOPOULOS: You buy three, and you get one more free.

KAKISSIS: Georgopoulos says the tax is something the Greeks have to bear so the country can stay in the eurozone and modernize.

GEORGOPOULOS: We must do some real, real big changes. For a couple of years, we will be very stressed and anxious. But if we really try to change this country for sure, the coming years will be much, much, much better for us.

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KAKISSIS: The sentiment is very different at Marios Petropoulos’s Athens restaurant. He saw his business almost go under when sales tax on restaurants and cafes went up to 23 percent in 2012 because of another eurozone bailout. The Greek government dropped the tax to 13 percent in 2013.

MARIOS PETROPOULOS: (Speaking Greek).

KAKISSIS: "We felt we could at least breathe as a business with that tax rate," he says. "Now we're going to go back into survival mode." At a table outside, mechanic Stavros Giaras dines with his wife and two friends. He says the increased sales tax will backfire.

STAVROS GIARAS: (Speaking Greek).

KAKISSIS: "I think it will actually increase tax evasion because if you can't break even, you won't pay your taxes," he says. "And it won't help tourism, either. Tourists will just go to Turkey, where it's cheaper." For NPR News, Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.