Helena Smith in Athens Sunday 21 June 2015
Helena Smith has watched as the crisis has engulfed Greece. Here she describes a week of mounting tension in Athens as fateful and painful choices loom
Athenians visit the Green market in the city. People in Greece have lived with the crisis for five years now, and fear a future of declining living standards and runaway inflation. Photograph: Milos Bicanski/Getty Images
Five years is a long time to be in crisis. It’s free-fall by a thousand cuts; loss in myriad ways, hard choices that never get easier.
Last week, as Greece descended into drama, a young man appeared on the marble steps of the neoclassical building opposite my home. Head in hand, he sat there from Sunday to Wednesday, in the beating sun, a wheelie bag in front of him, a slice of cardboard perched on top that read: “I am homeless. Help please!”
When you live in Athens you do not flinch at the signs of decay: to do so would be to give in. But somehow the sight of this forlorn figure – a waif of a man, eyes fixed only at his feet, the embodiment of wounded pride, brought home as never before that Greeks are in crisis. Was he giving up or making a hard choice? If he was 22, and he barely seemed that, his entire adult life had been spent in crisis. This is the great tragedy of Greece. It has not only been needlessly impoverished – it now eats up its own. The elderly woman who occasionally rifles through the rubbish bins on the corner of the square my office overlooks – often carrying a Louis Vuitton bag – is so glad she was born at the end of the 1946-49 civil war. “At least then it could get better. Today it can only get worse.”
For five years we have all felt as if we are on a runaway train, hurtling into the unknown. Sometimes the train picks up speed, sometimes it slows down, but never enough to stop. This week, as the drumbeat of default, impending bankruptcy and disastrous euro exit thudded ever louder, the train felt as if it might derail altogether. Had a lunatic got hold of the controls? On Monday morning it began to feel like it.
For me, the day started at 2am when I received a text from Euclid Tsakalotos, the point-man in negotiations between Athens and the European Union, European Central Bank and the International Monetary Fund – the three bodies keeping the debt-stricken country afloat.
“We made huge efforts to meet them halfway,” he wrote hours after talks reached an impasse over a reform-for-cash deal that could save Greece. “But they insisted on pension and wage cuts.”
By mid-morning, global stock markets were tumbling. By midday, the world had learned that, without an agreement, Greece might not be able to honour an end-of-month debt repayment to the IMF worth €1.6bn (£1.1bn).
By midnight, newscasters, looking decidedly nervous, had broken their own taboo: many were talking openly of euro exit.
Flurry of behind-the-scenes negotiations before European Union summit on Monday that could decide Greece’s fate
From the outset, the Greeks have felt at war. For most, it has been a war of attrition, a levelling of life under the brute force of austerity. The relentless budget cuts and tax increases demanded in return for two bailouts – at €240bn, the biggest rescue programmes in global financial history – were the breeding ground for the anger that fuelled Syriza, the radical left anti-austerity party catapulted into power in January; the creditors, with Germany at the helm, the convenient scapegoats for pent-up anger and rage. But by Tuesday the environment had become more poisoned still.
Addressing his increasingly irate Syriza MPs, the prime minister, Alexis Tsipras, ratcheted up the pressure, accusing the IMF of “criminal responsibility”. Greece would “never submit” to its, or Europe’s, “irrational demands”.
Later that day, the deputy defence minister, Costas Isychos, insisted that Athens meant what it said. “We are going to stop this neoliberal tsunami and this is not a bluff or a poker game. We are simply not going to go back on our promises,” he told me.
Was he not afraid of Grexit? Hadn’t I noticed, he retorted, that Europe was crumbling? “I hope they come to their senses and stop blackmailing the Greek government and the Greek people,” he snapped. “We cannot have a lowering of wages and pensions. We cannot be the only country without trade union rights or basic salaries. They cannot continue to use Greece as a giant guinea pig for neoliberal dogmas.”
With the rhetoric at such levels, it did not take long for diplomatic niceties to be dispensed with in Brussels. The ever-collected IMF chief, Christine Lagarde, would soon counter that there was an urgent need for dialogue with “adults in the room”.
The background of this story is Europe and the desire of a small country on its southern periphery, surrounded by enemies to its east and an incendiary Balkan peninsula to its north, wanting to remain a member of its central core. But at what cost? On Wednesday, thousands piled into Syntagma square, facing parliament to protest against austerity.
I chanced upon a group of schoolteachers, enraged that Europe was turning Greece into a “slave colony of debt”. All of them Syriza voters, of one thing they were sure: the government had made far too many concessions.
“Tsipras’s mistake is that he hasn’t toughened his stance,” said Dimitris Papatheodourou, for years an educator in a secondary school in Athens. “The government has already retreated on so many of its pre-election pledges. The 47-page proposal that it gave lenders [outlining reforms in return for cash] was horrible, a massive retreat.”
Papatheodourou is typical of the growing contingent who now think Greece might be better off outside the Eurozone. “I was never for rupture,” he said. “But now I am 100% sure that rupture is the only way out. Europeans are no longer being logical. The demands they are making are absurd.”
Is time running out to save Greece? With Athens’s access to bailout funds expiring in nine days, lenders say that it is, in no uncertain terms. Almost everyone I know feels trapped in some tragicomic theatre of the absurd: bit-players in a drama whose every act feeds the next. The script has no rules, it is writing itself.
Greece’s gargantuan debt may only have grown – the result of a rescue programme that has overly emphasised fiscal targets at the expense of structural reform – the economy may have shrunk by almost 30% and unemployment may be at record levels, but most Greeks still see Europe (and the euro) as the only way of ensuring that their country is saved from itself. The alternative – a precipitous decline in living standards, runaway inflation, riots and worse – is too awful to contemplate.
On Thursday, an even larger crowd poured into Syntagma, this time to chant “we are staying in Europe”. Among them were many older Athenians – clearly denizens of the city’s bourgeois elite, their hair coiffed, their Chanel suits immaculately pressed – who ordinarily would never take to the streets.
“People cannot believe what is happening. That we are looking at the prospect of the country going bankrupt or being ejected from the euro,” said Anna Asimakopoulou, a conservative MP who also took part in the protest. “For the first time this week I thought they’re not bluffing, if they don’t get a deal that they see as halfway decent they’ll go in the opposite direction, they’ll take the country out of the single currency. But the truth is there are no quick-fix solutions. There is a bad scenario and a worst-case scenario. Either Tsipras accepts austerity worth €5bn or we leave.”
Earlier that day I had sat with Tsakalotos in his eighth-floor office overlooking parliament. Urbane, sober, mild-mannered, the Oxford-educated economist is the “soft” face of Syriza abroad – the man who tempers the abrasiveness of the finance minister, Yanis Varoufakis. It was, he said, true that a “game of chicken” was being played. His hair had gone grey almost overnight. “It’s not out of pique or pride that we are holding out. We are holding out because we want to be able to deliver what we promised. Our bottom line is we can’t sign an agreement that is not economically viable.”
Not many had expected the drama to play out this long. As Europe’s pre-eminent anti-austerians, could they keep their nerve? “We have no choice,” he said, as news arrived that a meeting of Eurozone finance ministers had, yet again, ended in failure.
By the morning it was clear a mini bank run was taking place. Queues outside ATMs were small and orderly, but by lunchtime, when lenders close for the week, withdrawals by worried depositors were estimated at more than €3bn over the course of five days.
In Russia, the visiting prime minister stepped up the brinkmanship, proudly announcing that little Greece was not scared “to look towards other seas”. “Justice is on our side,” he said as Vladimir Putin, the Russian president, concurred that Athens’s creditors had misbehaved. Back in Athens, the headlines had become ever more dramatic. “Last chance for a deal”; “Knife at our throat”; “SOS Greece”, the dailies screamed from their front pages.
Five months of fruitless talks have wrought further mayhem. With each passing day the economy, already in stasis, deteriorates a little more. The cumulative effect of businesses closing – around 60 are believed to shut every day – has brought job losses of more than 20,000 this year alone.
That afternoon, in the boardroom of the Hellenic Confederation of professionals, craftsmen and merchants, Giorgos Kavvathas, the organisation’s president, painted a picture that was vivid and dark. He is a large man, who chose his words carefully as he fiddled with the cufflinks in his shirt.
“The market has been strangulated, there is no movement whatsoever,” he sighed. “And now they want us to take more measures, measures that have already failed, measures that will only make matters worse. What we are looking at is a slow death, because that is what they will mean.”
Later that night I spoke with Fotini Tsaliloglou, Greece’s foremost professor of psychology. Degradation has come in stages and now the whole nation is terrified of losing hope – the motto on which Syriza had run for office. “Dignity is being tested,” she said. “We are in a double bind with no easy way out. Greeks are such a proud people, and they feel so humiliated both economically and symbolically. It is going to take them time to adjust to the loss.”
Time, of course, is the one thing that is not on Greece’s side. And on Saturday, as the clock ticked ever closer to the make-or-break EU summit that will decide the country’s fate on Monday, it was menace that hung in the air.