His face contorted with anguish, Anargyros D recounted how he had lost everything in the aftermath of the Greek economic collapse — the food-processing factory founded by his father 30 years ago, his house, his car, his Rolex, his pride and now, he said, his will to live.
“Many times I have thought of taking my father’s car and driving it into a wall,” he said, declining to give his last name because he was reluctant to draw attention to himself under these circumstances.
Hunched over and shaking, he sat last week in the spartan office of Klimaka, a social services organization here that provides help to the swelling numbers of homeless and depressed Greek professionals who have lost their jobs and their dignity.
“I am a peaceful man but I hear my mother and father crying at night,” said Anargyros, 41. “We were the people in Greece who helped others. Now we are asking for help.”
It has been one year since Greece avoided bankruptcy when Europe and the IMF provided a 110 billion euro (US$155 billion) bailout. While no one expected the country to reverse its sagging economic fortunes quickly, the despair of Greeks like Anargyros D reflects a level of suffering deeper than anyone here had anticipated.
Economists are predicting a 4 percent contraction in GDP this year, and the raw numbers support the pessimism. Cement production is down 60 percent since 2006. Steel production has fallen, in some cases more than 80 percent, in the last two years. And analysts say that close to 250,000 private sector jobs will have been lost by the end of the year, pushing the unemployment rate above 15 percent.
With local headlines shouting of credit rating downgrades and the unlikely possibility that Athens might abandon the euro, panicky Greeks are pulling their money from banks. Greece lost 40 billion euros in deposits last year, and bankers here say withdrawals have increased recently.
These struggles have once again made Greece an urgent matter for the 17-nation eurozone, whose finance ministers met on Monday to discuss Greece and the debt crisis that has defied Europe’s year-long efforts to contain it.
On the table was whether Greece — which is now projected to miss its deficit target by as much as 2 percentage points of GDP this year — would require another round of loans totaling as much as 60 billion euros, and what further budget cuts would be required in return.
However, there is serious debate about whether this kind of prescription — subjecting Greece to more cuts and sacrifice in order to justify a second installment of funds from a reluctant Europe — is the right one.
This form of remedy violates two basic economic principles, according to Yanis Varoufakis, an economics professor and blogger at the University of Athens.
“You do not lend money at high interest rates to the insolvent and you do not introduce austerity into a recession,” he said. “It’s pretty simple: The debt is going up and GDP is going down. Have we not learned the lesson of 1929?”
The arrest on Saturday of IMF managing director Dominique Strauss-Kahn on sexual assault charges could create new uncertainty about a push for more severe austerity. Strauss-Kahn generally favored a less onerous approach, and if he is forced to resign it is possible that tougher conditions preferred by Germany will be imposed.