Austerity measures have hit hard in the eurozone nations struggling under the burden of huge debts. In Italy, merchants have seen their worst Christmas season in 10 years, but in Greece the situation is far worse: health care once provided to the poor and unemployed has been cut so substantially that, in the words of many experts, the results have hit like a tsunami.
Bloomberg reported that Italians cut holiday spending substantially even before new austerity measures instituted by Prime Minister Mario Monti took effect. The Rome-based consumer group Codacons said on its website that Italians spent 48 euros ($62.75) less per person this holiday season than they have averaged over the past five years.
Hardest hit was the clothing and shoe sector, losing some 30% of sales; Codacons added that those retailers would not regain any lost ground during their customary January seasonal promotions.
Carlo Rienzi, head of Codacons, said in a statement that the January discount period “will be a flop,” and sales could fall as much as 40% compared with 2010 levels. Fears are that Monti’s new austerity measures, which include a luxury goods tax, higher prices on gasoline and levies on primary residences, will compel households to cut spending even further as they seek to make their money go farther.