SIPPING ESPRESSOS AND SMOKING AWAY, the Greek millennials packing the fashionable coffeehouse in the port city of Nafplio don’t seem to be suffering through an economic crisis. But don’t let appearances fool you, a 26-year-old named Athanasia cautions me. “Every day, I wake up feeling insecure,” she says. “People my age are not sure of anything.” Though Greece’s infrastructure would certainly seem to need civil engineers such as her, Athanasia has worked just three months in more than a year. Many of her peers have moved to Germany or elsewhere for work; she wants to remain here, though it may mean moving back in with her parents.
Like many Greeks, especially young ones facing exceptionally high unemployment, Athanasia is feeling the effect of years of measures imposed on her country by lenders attempting to rein in its entrenched inefficiency. Just weeks before my visit, University of Massachusetts graduate student Thomas Herndon and two fellow economists had reported errors in an important 2010 research paper by two Harvard economists that had informed austerity policies throughout Europe. But the academic brouhaha that followed seemed to matter little to most Greeks. For them, austerity is like sequestration on steroids, leading to reduced services, sharply lower wages and pensions, and much higher taxes. “We were used to living one way, with more money,” says Athanasia. “Now life is always hard.”
Most tourists probably don’t notice Greece’s crisis, though it was hard to miss the “Merkel die” graffiti near the Acropolis, a reference to German Chancellor Angela Merkel, who as head of the nation picking up much of Greece’s debt has been pressing for reforms. Mostly I found Greece and its people to be beautiful, friendly, and fascinating. Yet ask a few questions, and you learn people are fed up with austerity, even as they’re split about whom to blame.
“I’m angry with what is being done to Greece, but I am also angry with our politicians because they created a monster,” says Christos Bouchoutsos, a travel agent born in Nafplio. The government allowed public-sector employment to balloon fivefold between 1970 and 2009. “The dream of the Greek family was to put your child to work in government because you will never lose your job. Maybe we did need pressure from the outside to change.”
One of Greece’s biggest problems is tax evasion, especially by the rich. By some estimates, Greece could wipe out its 2013 budget deficit if its 1,500 biggest scofflaws paid up. Bouchoutsos has paid his taxes, partly because he wants to start a car-rental business. But he also faces a mountain of paperwork and tight credit. “We needed change, but now it has gone too far and is killing the private sector,” he says.
Austerity is “absolutely causing pain,” says Tufts University economics professor Yannis Ioannides, who spoke to me in late May while attending meetings about the crisis in his native land. “It is being felt mostly by the weakest parts of the population, which fuels cynicism” about things like paying taxes, perpetuating the vicious cycle. Despite the flaws in that 2010 Harvard paper, Ioannides believes the central logic of austerity still stands. “The basic theory is we will reduce costs enough so we become competitive again so we can reduce deficits and live within our means,” he says. “It will be a slow process, but hopefully better days are ahead.”
In the meantime, the Greek political system faces severe strain, especially from the far right, where the neo-Nazi Golden Dawn party has polled well enough to win seats in Parliament. Greece is the ancient home of democracy. Austerity is putting that system to a very modern test.
BY THE NUMBERS
Unemployment among Greek 16- to 25-year-olds, the highest rate in Europe
Phil Primack is a regular contributor to the Globe Magazine. Send comments to email@example.com.