Europes economic woes hitting home in Canada
By Tavia Grant
The Globe and Mail (Canada), May 3, 2010
Troubles in southern Europe are hitting home for many of the 2.4 million Canadians with origins in Greece, Portugal, Italy and Spain.
Euro woes have rocked global stock markets and wreaked havoc with currencies. At the macro level, economists say the regions fiscal crisis now represents the biggest risk to the global recovery.
But the turmoil is trickling into the micro level, too. From local food importers who are seeing distribution interrupted as Greek suppliers fold, to Italian-Canadians, whose homeland pensions have dwindled with euro weakness, many are watching the crisis with growing consternation.
And they loathe the PIGS acronym.
Alexander Georgiadis imports goods such as olives, feta, baklava and balsamic vinegar as president of Krinos Foods Canada Ltd., the countrys largest importer and distributor of Greek specialty foods.
He has been hit hard by the fiscal crisis on a number of fronts. A string of general strikes in Greece have disturbed shipments. A port dispute also upset distribution. Some of his small-scale, family-owned suppliers have folded. He was able to find other suppliers for some products, such as olives and peppers. But he hasnt found any replacement for his now-bankrupt supplier of canned anchovies.
Wild swings in the exchange rates are causing worse headaches. Theoretically, importers like Mr. Georgiadis should benefit from the euro's 15-per-cent slide against the Canadian dollar in the past half year. In reality, it has made business planning chaotic because prices and costs change between when a deal is signed, and when the goods arrive. 'The volatility of the currency is the biggest problem we're facing trying to guess every time when you should make a payment.'
Hes fielding calls from worried friends in Canada, asking whether they should move their savings out of banks in Greece in case their accounts are frozen. He thinks their money is likely safe but many people are moving money out of the country anyway.
Then there is the personal worry. 'Im very preoccupied,' says the Toronto-based business man. 'Its not going to be easy to do all the changes that are necessary. There is a big danger of social unrest, and thats what people are afraid of.'
Canadian officials are also fretting. Bank of Canada Governor Mark Carney said last week that the problems could hamper the Canadian recovery, while Toronto-Dominion Bank said the Greek fiscal crisis 'represents the largest single risk to the global economic recovery.'
A host of concerns are rippling through Canada's Greek community, said Crist Geronikolos, president of the Canadian Hellenic Congress and the Greek Community of Toronto.
Many people have investments in the Greek stock market, which has tumbled 31 per cent in the past six months. Others with property in their home country are bracing for tax hikes. Talk is starting to percolate about immigration how, if things worsen, more people will want to leave the country.
Then there's the added insult of the PIGS (Portugal, Italy, Greece, Spain) acronym, which he says compounds a negative perception of Greece. 'It is irritating people. You know what? That gives a really bad connotation. There's a lot of other countries around the world with a much larger deficit, but with the ability to print money. Greece doesn't. It's an unfair portrayal,' Mr. Geronikolos said.
Sharing entrepreneurial know-how may be the best way for the ex-pat community to help Greece, said Werner Antweiler, who specializes in trade at University of British Columbia's Sauder School of Business. 'The Greek expatriate community in Canada can contribute to Greece's recovery by fostering entrepreneurship in Greece, as many immigrants from Greece have become successful business people here in Canada. It's that kind of entrepreneurial spirit that will move things forward in Greece, along with the necessary policy corrections.'
Some Italian-Canadians are also feeling the effects. The euro's dive means pensions from Italy and elsewhere are worth much less than a year ago, said Angelo Persichilli, columnist at Italian-language newspaper Corriere Canadese. 'They are very concerned,' he said. 'Now that the euro has lost 15 per cent, for pensioners it's a huge loss. We are talking about millions of dollars in losses to vulnerable people who are on a fixed income.'
His newspaper, too, has been hit. Italy's government, which finances many overseas Italian papers, is proposing to slice the Toronto-based paper's budget in half as part of its austerity measures.
It has also become tougher to drum up interest in investing in Italy, said Corrado Paina, executive director of the Italian Chamber of Commerce of Ontario. 'Canadian investors in this moment aren't too eager to invest in Italy.' Conversely, he's seeing more Italian companies that want to boost their presence in Canada because of its relative economic stability.
There are some positive offshoots, however. For many who regularly return to their homelands, the strength of the Canadian dollar is making those visits much cheaper this year. And a falling euro is generally advantageous to Canadian importers.
Brito Fialho, president of the Federation of Portuguese Canadian Business and Professionals, said most members of his organization haven't yet felt a negative impact. But some people with investments in Portuguese banks are 'a little apprehensive.'
Mr. Geronikolos is also apprehensive about his homeland. 'We look at this little country … and it hurts to see whats happening,' he said. Still, the hope is Greece will emerge 'after being a little bruised and battered, stronger and better for the experience.'