On the Precipice: Can Greece Save Itself and the Dream of a United Europe?

Giorgos Moutafis
Strike force Police and rioters square off in front of the Parliament building in Athens on Oct. 19

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Democratic Deficits
Greece's inefficiencies are not limited, however, to the powerful and wealthy: its unsustainable economics penetrate all the way down to its labor force. Greece's public sector has nearly 1 million workers, almost 20% of the total working population. They make three times the amount of those who work in the private sector, on average, and until recently have enjoyed far greater job security. The result is enormous indebtedness for public-sector companies. In 2011 the main government train company incurred more than 231 million euros in losses, an annual deficit of 1 billion euros and a total debt of 10.7 billion euros.

Party-loyal syndicates control much of the private economy, stifling efficiency. The truckers' syndicate, for example, until recently controlled all the licenses for truck transport in the country by law and reportedly has issued no new ones since 1970. The resulting inefficiencies cost the economy as much as 1.5 billion euros a year, according to a report issued earlier this year by the Foundation for Economic & Industrial Research, a Greek think tank.

Recent polls show that 70% of the country wants to remain in the euro zone, but most of the populace distrusts the government, and many are ready to fight against the belt-tightening measures necessary to balance Greece's budget. Under the new austerity plan, social security would be cut by 5 billion euros over the next four years, public-sector wages would be cut by 20% over the same period, monthly pensions above 1,000 euros would be cut by 20%, and the retirement age would be raised to 65 for everyone. Workers see an undue burden being placed on them. "We're going to be like those workers in China soon, who get paid a few cents a day to work 14 hours without a break," says Tasos Alevizos, 52, who was laid off from the Athens-Piraeus railway with 59 co-workers in September, all of them reassigned to work as security guards at the National Archaeological Museum of Athens for about half their previous salary.

Even if Greece can survive the near-term threat of civil unrest and stave off expulsion from the E.U., it still faces long-term challenges to transform itself into a truly competitive and productive economy. And to do that, it will need to effect changes that strike at the heart of a malfunctioning society. It will need a trustworthy government like the one the statistician Georgiou is attempting to establish, citizens like the law professor Hatzis who are willing to pay higher taxes even as their income drops, and workers who are willing to work longer hours and retire later. "Either we work together and work hard to change what's so fundamentally wrong with our country," says Giraud, the executive turned public gardener, or "it will be everyone for himself, attacking each other to get the dregs of what we've left our society with." In Athens now, it is hard to tell whether that fear is driving people together or just beginning to tear the country apart.