Athens Pawnbrokers Cash In

It isn’t just London pawnbrokers who can claim business is booming. Thanks to the state of the Greek economy and the EU laying down the law to Athens, the city has seen 201 new pawnbrokers open up in the last year – before Greece hit hard times there were just 23 pawn shops in Athens.

Unlike the few original shops, these new stores aren’t hidden away down back lanes and off streets either. Taking advantage of the falling rents and empty store fronts these entrepreneurs are grabbing high street locations in prominent parts of the city.

Thanks to the new taxes imposed as part of the Greek Governments austerity measures these new pawnbrokers are thriving as the cash strapped Greeks look for ways to free up the cash tied up in their yachts, gold jewellery and property.

Many of the established jewellers in the city are now jumping on the gravy train with ‘cash for gold’ signs showing up in lots of their store windows. They started competing with the pawnbrokers when it emerged as many as 8 out of 10 Greeks using pawn shops actually wanted to sell their valuables outright rather than use them as security for a short term loan.

In their reporting of this story the New York Times quotes Yiannis Spiratos, the manager of a pawnbrokers in the middle of Athens.

“Gold is strong so there’s a lot of interest in selling. We’re just serving that interest.”

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 £1000 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 jewellery 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 O.K. 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. Source

While the Greek Government are obviously happy people are taking neccessary steps to raise the funds to pay the new taxes they aren’t so happy with the pawnbrokers and jewellers who are buying up all this gold for cash. A recent spot check on those trading in gold found a whopping 80% were guilty of tax evasion – costing the cash starved Government possibly billions of Euros and certainly many millions according to the financial crimes unit.

The police say many are moving large quantities of gold out of the country illegally to avoid taxes and that some are taking what are known to be stolen items of jewellery and quickly having it melted down in one of the 10 foundaries now operating in the Athens area – an increase of 300% in the last 12 months.

A car was stopped recently at the port border control in Patra and was found to be carrying half a ton of silver bars with no paper work. The police traced it to a pawnbrokers in the center of Athens and found the owner had already successfully sent around £5 million worth of gold to Germany to avoid paying taxes on his profit.