Dispatch

Greek Disease

Inside the new sick man of Europe.

The first time I tried to apply for my Greek residence permit, there was no one there to take my application. To the bemusement of the lawyer who accompanied me, the office was shut in honor of -- no joke -- the patron saint of lawyers. When I did finally manage to submit my paperwork, the clerk merely shrugged when I asked how long it would take. "A year," she said, "maybe two."

As the spouse of an EU citizen, getting my permit should have been a formality. But legal arguments, my lawyer advised, would get me nowhere. Instead, a call to the government office that deals with foreign journalists got me my residence interview scheduled in record time -- delayed only by an inconvenient, month-long Christmas strike. (Though to be fair, the six chain-smoking, frappé-drinking officials who attended the interview to rubber-stamp my application were reasonably friendly.)

This is the image of the Greek civil service that's making the rounds in Europe these days: a group of lazy, corrupt, and inefficient officials who may or may not show up for work before retiring on cushy pensions. As Europe grapples with the fallout from Greece's excessive state debt, frugal Germans are balking at the idea that they should bankroll their tax-dodging, early-retiring Mediterranean partners.

Of course, there is some truth to this narrative. Generations of Greek governments have padded the civil service with their supporters and in the process created a flabby monster of a state that in 2008 ate up 48 percent of Greece's GDP. No wonder pressure is mounting in Brussels and Berlin for deeper budget cuts before Europe will come to Greece's rescue.

There's a tendency at the moment to blame Greece's current financial woes on a failure of the Greek character, as if it could be explained by stereotypes of Mediterranean laziness. But while it's true few civil servants put in what a German taxpayer would consider a full day's work, the dirty secret is that the system assumes they don't. Few families can survive on a civil servant's salary, so nearly everyone works a second job or engages in petty corruption. Many public employees work on temporary contracts with few benefits, and since tax evasion among the self-employed is rife, workers bear the brunt of the country's tax burden. As an old Soviet joke making the rounds here puts it, "We pretend to pay them, and they pretend to work."

Teachers teach after-school classes at private frontistiria. State doctors expect fakelakia, literally "little envelopes," or see their state patients in their private offices after hours. According to a study done last year by the local Transparency International office, the going rate for fakelakia for an operation was 870 euros, or about $1,180.

Take Marianna, a 32-year-old waitress in Athens's bohemian student district Excharia, also famous as the home territory of Greece's small but ferocious far-left anarchist and anti-authoritarian movements. The neighborhood catapulted to international attention in December 2008 after the fatal police shooting there of a 15-year-old boy set off weeks of rioting and violent clashes between police and protesters. Marianna has a degree in art restoration and worked for a while for the Ministry of Culture. But the pay was so low and irregular that to survive, she had to take extra work in a café -- where she was usually paid under the table.

"I worked for the ministry, I was usually employed on three-month contracts, but I only got paid six months later," she said. "If I wanted to get a new contract, I had to be nice to the right person, give them favors." Eventually, she gave up. She makes more money working full-time waiting tables.

The rot is built into the system -- and that's one reason it's so difficult to change. Greece's bloated, inefficient state sector strangles the economy with a bureaucracy that makes doing business legally nearly impossible. It allows corruption to flourish.

"Greeks don't understand the simple truth that they're paying for everything two times," says Stravros Katsios, who teaches economic crime and governance issues at Ionian University. "They are paying two times for their education system, they are paying two times for their health system and two times for their public sector: the first time through taxes and the second time through corruption."

As Greece emerged from the poverty and political instability that dominated the first two-thirds of the 20th century, Greek families poured their resources into educating their children. Degrees were supposed to be the ticket to a better life in a new European Greece, but many young people despair at finding decently paid, steady work that will enable them to have a family and independence. Well into their 30s, many still live with or are supported by their parents.

Greeks aren't under any illusions about their state or society. They know their schools are terrible, their hospitals are crumbling, and their economy is far from competitive.

That's one reason many Greeks are taking all this talk of austerity measures in stride. Polls consistently show that a wide majority of Greeks support Socialist Prime Minister George Papandreou's proposed fixes. Many are cautiously hoping that the crisis might actually force real reform. "Every Greek knows what's happening," says Vangelis Agapitos, an independent economist. "People know the situation is bad so they're willing to do their part." But, he said, they want to their sacrifices aren't just going to line the pockets of politicians: "However, they're saying, don't try to fool us."

Before his election, Greeks were skeptical of the American-born, bicycle-riding Papandreou, whose father and grandfather were both prime ministers. But he's won some grudging respect with his willingness to stand up to the unions and other traditional allies on the left, as well as with his appointment of a largely non-ideological, technocratic cabinet.

There have been the inevitable strikes and protests against higher taxes and civil sector pay cuts -- Greece is still Greece -- but so far they've seemed half-hearted. Despite the militant bellows of "We will not compromise!" shouted by union officials over bullhorns, the first major protest called by Greece's main civil servants union, held on a rainy Feb. 10, was a mellow affair that drew only a few thousand people. This week, farmers finally called off their month-long blockades of major roads and the Greek border with Bulgaria, sheepishly acknowledging the government had no money to give them. And on Feb. 17, tax officials called off a planned 24-hour strike.

Papandreou's government is under enormous pressure to simply cut deeper, especially when it comes to the civil service. He's countered that any long-term solution requires tackling the roots of Greece's problems -- combating corruption and nepotism, eliminating waste, and rebuilding trust in the government to encourage a culture of tax and regulatory compliance.

But fixing Greece will be no easy task, and the government is walking a fine line, trying to slash deeply enough to assuage market and European fears without deepening the recession or sparking more serious public resistance. If Greeks really decide to riot, it won't be civil servants marching under umbrellas. It will be masked anarchists smashing shop windows, torching banks, and bombing government offices.

For now, Greeks are hunkering down. The global recession is now hitting hard: Thousands of shops have closed, and caf és and restaurants are half-empty. The austerity measures will no doubt deepen the pain. But Greeks have been through bad times before and they seem willing to wait this one out, at least as long as they think better days lie ahead.

"We know it will be difficult," said Anna, a nurse. "But I'm worried for my children. Will they have a future?"

LOUISA GOULIAMAKI/AFP/Getty Images

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