Athens and other major Greek cities were turned into battle zones last December, triggered by a fatal police shooting of a teenage boy. The violent protests involved hundreds of self-styled anarchists and thousands of students, already outraged by one of the most corrupt governments in Europe, a church tainted by scandals and a high rate of unemployment. While politicians have been left with a lot to explain, economists are still trying to quantify the costs.


Retailers suffered a double whammy during what should have been their busiest time of the year: premises were damaged while stock was looted rather than sold. Some experts estimate the losses in Athens and Thessaloniki, northern Greece, will total €2bn.


This prompted the government, criticised for passively watching events unfold, to chip in with financial aid, putting further strain on state finances. Greece’s budget deficit has exceeded the EU’s 3% limit for the past two years while public debt is the second highest in the Eurozone after Italy.


Of even more concern is the beating Greece’s reputation as a holiday destination has taken. The tourism industry, which accounts for around 20% of the economy, had been enjoying strong growth rates since the Athens 2004 Olympic Games. The €13bn bill left behind by the world’s largest sporting event had started to pay itself off but this good run is coming to an end. Images of hooded youths taking over cities and setting fire to buildings and cars were flashed across the globe, seen by cautious consumers already thinking twice about this summer’s holidays on the back of a strong euro.


“We have gone back ten years,” wailed one industry source. Sector representatives are not making forecasts for this summer, citing an unclear outlook due to the global downturn, but everyone agrees it will be a difficult year.


The riots have also darkened the clouds of political uncertainty, as calls for elections grew during the civil unrest. The ruling conservatives, with 151 seats of the 300-seat parliament, are trailing the socialists in the polls. But neither party has enough support to form a government. Citibank has described this situation as being “bad news” for large state-controlled companies, creating management uncertainties in firms in which foreign investors hold large stakes.


While the financial costs of the riots are hard enough to brush off, the government is increasingly aware that unless steps are taken to address their causes, scenes of civil unrest may well be repeated.


Stelios Bouras is the business editor of Kathimerini-International Herald Tribune and a contributor to the weekly Athens Plus newspaper. www.ekathimerini.com