The Full Catastrophe (3 page)

By the time Greeks were given a chance to vote in May 2012—the first parliamentary election since the bailout agreements were struck—it was evident that the previous political order was disintegrating, and anti-bailout parties were on the rise. An amalgamation of far-left groups, the Coalition of the Radical Left, or Syriza, won a great deal of support by vowing to cancel the
mnimonio
and restore social spending. Greece had become a colony of a neoliberal regime in Germany, its leaders declared, and they vowed to raise money by making Germany pay reparations for damages inflicted on Greece during the World War II occupation. Greek right-wing voters took a far more extreme turn toward Golden Dawn—a neo-Nazi party that denied being neo-Nazi—which was expanding its popularity beyond the ragged central Athens neighborhood where it had unleashed assault squads to hunt dark-skinned immigrants on the streets. Many Greeks reacted positively to Golden Dawn’s assertions of Hellenic superiority, and its pledge to put the nation above all else.

In the May election, Syriza came in second just behind the
center-right New Democracy party, and Golden Dawn won its way into parliament. No party, however, had enough votes to form a government, and so a new election was called for the following month. In the interim, the country seemed to be succumbing to ungovernable chaos. Global financial markets convulsed in fear of an impending win for Syriza, whose young, necktie-averse leader, a former communist youth activist, threatened to renege on Greece’s debt obligations. German politicians renewed public deliberations over whether it would be best to eject Greece from the eurozone. “Grexit” became a frequently used word. Greeks started removing cash from their bank accounts over fears that ATM machines would soon start spitting out worthless drachmas. The severe bank run that resulted and the deepening cycle of doubt did not create an environment conducive to economic recovery, which of course made Greece’s problems even worse.

In the next election, New Democracy, which depicted itself as the safe choice for voters wishing to remain in the euro, eked out a narrow victory, and on account of a parliamentary seat bonus afforded to the party with the plurality of votes, was able to form a coalition government that included its former rival, PASOK. Antonis Samaras, the new prime minister—who, incidentally, had also gone to Amherst College, where he had been roommates with Papandreou—vowed to European leaders that he would honor the second bailout agreement, though he had railed against the first one when still part of the opposition. German chancellor Merkel, wary of who would take power should Samaras falter, silenced Greece’s critics in her government and started praising Greece’s reform effort.

Greece had been rescued, but by this point, it was perishing by a thousand cuts. A Greek hotel owner once summarized the country’s predicament to me like this: “First, Greece has the problem of itself. Second, Greece has the problem of the Troika.” This seemed to me like a pretty good way to think about the Greek
crisis. Greece had driven itself to fiscal and economic collapse. In response, however, its European and IMF creditors—who, in fairness, faced uniquely vexing challenges in trying to come up with a solution—made big mistakes. Initial European ambivalence over how to deal with the crisis and an overdose of self-defeating fiscal austerity deeply worsened Greece’s situation. Despite the spending cuts and tax increases meant to fix Greek finances, the country’s debt load in relation to the size of its economy continued to rise. At the same time, Greece’s options for restoring growth were severely constrained by the eurozone membership it had earlier so benefited from. Unable to control its monetary policy or boost its export competitiveness through currency devaluation, Greece’s only hope was to lift exports through wage cuts intended to make Greek products cheaper. The same cuts, however, had the effect of obliterating consumption at home, and the small rise in exports came nowhere near to offsetting this. At the same time, Greece lagged on healthy reforms contained in the
mnimonio
—those that would have made its economy more open and competitive by doing away with burdensome rules that benefited only powerful interest groups.

By the time of Greece’s independence celebration, the economy had contracted by 25 percent over the previous six years. Slight growth, driven by tourism, would soon reappear, but the kind of sustained and robust expansion needed to undo the depression’s damage seemed a distant possibility. Unemployment remained not far off its peak of around 28 percent. Greece had become a country where many people found it hard to fathom a future, sparking an exodus of job seekers abroad. Greek newspapers ran stories about children fainting in schools from hunger. Parts of Athens and its suburbs were lined with shuttered stores. Lines at church and municipal food kitchens went around the block. During the winter, a harmful plume of smoke hovered above Athens, as people chose to burn wood rather than pay the high price of heating oil. At the
same time, Greek government debt—the source of the country’s problems to begin with—was near its crest of around 176 percent of GDP. All along, only a small fraction of the bailout loans Greece received directly financed state operations; the biggest chunk of the money went to service older debts and recapitalize banks. The Greek bailouts had preserved the euro, but Greece, by any measure, was buckling.

In a bid for survival, the conservative-led government tried to emphasize the positive news. In addition to slight economic growth, the country attained a small “primary surplus,” meaning that it was covering its expenses, except debt interest. This marked a drastic adjustment from the deep deficits that had led to Greece’s troubles. Greece also made a relatively successful cameo appearance on the bond market for the first time since the initial bailout agreement. Greeks, however, did not take much encouragement from abstract notions like a bond sale or “primary surplus.” The government may have dramatically improved its budgeting, but Greek families’ finances were far worse as a consequence.

At the beginning of 2015, Greek voters, exhausted by economic gloom and rule of the
mnimonio,
completed the razing of the established political order that had begun a few years earlier. After a snap general election, Syriza won decisively, at least by the splintered standards of Greece’s crisis-era parliamentary politics. Alexis Tsipras, the new prime minister, immediately vowed to end the subjugation of the Troika, to discard the
mnimonio,
and to halt the “austerity of catastrophe.” His government said it would seek a new and more favorable agreement with its official creditors—one that kept Greece in the euro while providing debt relief and financial wiggle room to restore social spending.

What many Greeks proudly saw as their new government’s reassertion of sovereignty, however, eurozone leaders interpreted as recalcitrance and carelessness. This was particularly the case in Germany, where ruling politicians demanded Greece honor
the existing bailout agreement and questioned how its government could renege on the deal and still ask for money or debt relief, which would come at a cost to German and other European taxpayers. Given the discordant impasse between the two sides, doubts over Greece’s future in the eurozone once again intensified. “Grexit” reemerged in the lexicon, and even as many Greeks heralded Syriza’s bold stance toward the Troika, concerned Greek depositors began transferring their euros out of the country, stoking fears of another crippling bank run. Meanwhile, the state’s income rapidly eroded as many Greek taxpayers, anticipating Syriza would ease their burden, simply stopped paying, leaving the new government, just weeks in office, struggling desperately to make its debt payments and avoid default.

Running out of time and money, Syriza’s leaders—like their predecessors—were compelled to yield to the creditors. In exchange for limited concessions, Greece’s new government agreed to extend the bailout program for some months—and along with it, the reviled
mnimonio
—though the agreement contained enough ambiguity to allow Greek authorities to deny this was the case. The arrangement gave both sides a bit of time to try to negotiate a much bigger deal—what would essentially be a third bailout. The negotiations over the terms of further financial assistance promised to be fraught and acrimonious. Whatever the outcome, the inevitable economic and political turbulence promised to further punish the fragile Greek economy, keeping Greece scrambling to pay its bills. Five years after the first bailout, Greece’s place in the eurozone seemed as imperiled as ever.

Immediately following Syriza’s victory, however, many Greeks seemed to set aside these worries and reveled in what felt like a return to national self-determination, however fleeting or illusory the sensation may have been. “Greece is no longer the miserable partner that listens, that listens to instructions to do its homework,” Tsipras declared in a speech in parliament shortly after
taking power. “Greece has a voice. Her own voice.” For the moment, many Greeks approved. Their country, it seemed, was at last breaking the grip of its creditors and regaining its independence.

The first time I went to Greece as a journalist was near the end of 2011, when I traveled to the Ionian island of Zakynthos to write a story for the
Wall Street Journal
about the alleged dispensation of fraudulent blindness benefits to hundreds of locals. In the following years, I returned for reporting assignments as often as I could. Greece was familiar to me but still foreign enough that I often found myself bewildered by it. The stories in this book show the ruins of the deeply flawed, long-established political order I encountered, and a glimpse of what may arise to replace it—some signs of positive change, but also bleak developments that presage still dark times ahead. I borrowed the title,
The Full Catastrophe,
from a line uttered by the character of Alexis Zorba in the 1964 film
Zorba the Greek,
which is based on the Nikos Kazantzakis novel. The famously spirited Zorba—who, to the point of cliché, came to be thought of as a quintessentially Greek character, prompting many foreign tourists to try to find him among the locals—treats catastrophe both as something to be mourned and a beginning to be embraced. Greeks, given their lengthy past, have many historical catastrophes to lament. Even so, the debt crisis and its accompanying economic depression ranked pretty high on many people’s lists. At the same time, many Greeks acknowledged one key benefit of the catastrophe: it had laid bare enduring civic failings and made stark the need for profound political change. Whether Greece would be able to transform itself into a more socially just and economically self-sufficient country without falling apart in the interim, however, remained to be seen.

1
Island of the Blind

Wealth I would have, but wealth by wrong procure I would not; justice, even if slow, is sure.

—Solon

O
n the island of Zakynthos, in a square by the main harbor, stands a statue of Dionysios Solomos overlooking the cerulean sea. Born on the island at the end of the eighteenth century, Solomos is often referred to as Greece’s national poet, having written the
Hymn to Liberty,
the first two stanzas of which are now used in the Greek national anthem. “From the sacred bones of the Hellenes arisen, and valiant again as you once were, hail, o hail, Liberty,” goes one verse. The words were written in 1823, during the revolution, when the Greek intelligentsia looked to an over two-millennia-long history for the ideological adhesive needed to pull together a new nation. Solomos is revered for his lyrical role in the effort, and his likeness stands on Zakynthos with an outstretched right arm in the classical orator’s pose, though in reality he probably wasn’t much of a public speaker. The poet was an endless reviser and perfectionist, and the hymn is among the very few poems he ever completed.

On a December afternoon in 2011, as I stood in front of the
statue of Dionysios Solomos, European leaders and the IMF had recently offered Greece its second bailout, and in return they demanded that Greek politicians change almost every aspect of the way they governed the country. The Greek government, eager to appear like it was obediently embracing a reform agenda, began efforts to root out some of the corruption that pervaded Greek life, and had by this point captivated the international press. During this time, people reading their newspapers in Europe and the United States learned Greek words such as
fakelaki
(“small envelope”), the Greek slang for a bribe handed over in order to, as Greeks often put it, “oil” the government machinery and make it work a bit faster. In Greece, if you twisted your ankle and had to go to a public hospital, you handed over a
fakelaki
to avoid a long wait to see a doctor. If your electricity went out, and the power company workers who arrived said they would have to come back tomorrow to fix it, you handed over a
fakelaki
to inspire a more immediate solution. (“If you don’t oil a bit, nothing gets done,” a homeowner once told me after I witnessed the latter take place in front of his house.) People abroad also learned about the
rouspheti,
a word that has Turkish origins and means a special, reciprocated favor. A
rouspheti
often involved a politician and a voter, and often an unwarranted government benefit and a vote, one in exchange for the other. The
fakelaki
and the
rouspheti
were mundane facts of Greek life, long before Greece joined the European Union, and long before it joined the eurozone. Now, though, as Greece was being thoroughly scrutinized by its creditors, the rest of the world was learning about them. So was I, for that matter. I’d come to Zakynthos to report about an alleged scandal involving both the
rouspheti
and the
fakelaki
that had drawn particular consternation and fascination in Greece—and in Germany, where I first heard about it.

I was in Berlin at a dinner gathering when the subject of Greece came up and the middle-aged man sitting next to me, who worked
for the German justice ministry, asked me whether I had heard about “The Island of the Blind.” He then told everyone about an article he had read about a ridiculously high number of Greeks on Zakynthos claiming to be blind in order to collect a government disability check. He and others at the table were clearly amused and perhaps a bit disgusted. This was the kind of news that made Germans question whether they should be the guarantors of the massive bailout loan package Greece was about to receive. As he told the story, I was surprised to find myself, owing to my Greek heritage, quietly stewing. These Germans! Picking on the Greeks even as Athens is burning! Around that time, Greece was making deep cuts in wages, pensions, and social spending, and, despite rising opposition, was about to push through more cuts in order to secure the second bailout. Athens was witnessing massive protests, and Greece, it seemed, was fraying. Perhaps sensing my sensitivity, everyone moved on to other topics, but after I got home, I read Greek and German press reports about Zakynthos. The Greek health ministry, suspecting fraud, was apparently looking into unusually frequent instances of blindness on the island. As they were doing so, the preponderance of fraudulent disability benefits—what the Greek media call “monkey benefits”—had become a big story in Greece.

A few days later, I called the Greek health ministry and spoke to an assistant to the then deputy minister. My original idea was to report a story about how such scandals attract a great deal of attention, but say little about the average, honest Greek. However, the conversation with the aide did not lend support to this angle. The previous year, the aide said, nearly 700 of the island’s population of 39,000, about 1.8 percent of the island’s residents, had claimed the blindness benefit—a check of up to 724 euros every two months and perks such as discounted utilities. This ostensible prevalence of blindness, I later found, was about nine times the rate estimated for many European countries, according to a 2004 study published
in a World Health Organization journal. “We have very extensive instances of fraud,” the aide told me, not just on Zakynthos and not just people pretending to be blind, but all kinds of feigned disabilities in every prefecture of Greece. There is evidence of a huge increase in the number of disability benefits handed out just before election periods, he added. I asked if the ministry was planning on pursuing criminal charges against such disability fakers. The priority, he said, was to put an end to the practice rather than punish those who’d engaged in it. “If you start putting people in jail, maybe you’ll have to put half of Greece in jail.”

After this conversation, I took a flight to Athens and caught a bus to the western coast of the Peloponnese, where I boarded a nighttime ferry to Zakynthos. On the boat, I sat in a movie theater–like seating area with reclining seats and cup holders while the television in front of me broadcast images of the protests I’d seen that morning in front of the Greek parliament building in Athens. A newscaster noted that Greece ranked at the bottom of Europe, and near Peru and Morocco, on Transparency International’s Corruption Perception Index. When we reached the port, I took a taxi toward my hotel in the main population center, Zakynthos Town. On the way, I asked the driver if he had heard about the blindness scandal. Yes, he had, and it was a good thing, he added, that they were finally doing something about this kind of corruption. Then he overcharged me by a few euros and gave me an old receipt that was in the ballpark of what he’d asked me to pay. I was too tired to protest.

The next morning, I awoke to the sound of church bells and happy shrieks of playing children and stepped out onto my balcony. It was sunny, and the Ionian Sea, which had been invisible under the moonless darkness when I arrived, was as azure as it appears on postcards. Below, an elementary school next to the hotel was coming into session. Children ran around a courtyard until a school official in faded jeans emerged and stood on the
steps. The children formed a series of haphazard lines in front of him and grew quiet. The man then crossed himself, and the children dutifully followed. This was a public school, but separation of church and state remains a somewhat foreign concept in Greece. The island has a significant Albanian migrant worker population, and the Albanian kids, likely Muslims, lingered in the back of the lines and did not participate. The rest of the children uttered a prayer while crossing themselves to its cadence: “Through the prayers of our holy fathers, oh Lord Jesus Christ, our God, have mercy on us and save us. Amen.” The children added a “Good day!” before hurrying into their classrooms.

I’d obtained the name and number of a woman working in “welfare,” slang for the local office otherwise known as the Directorate General of Public Health and Social Solidarity, which administered the blindness benefits. When I walked into the office, my contact, Maria, greeted me at her desk. She wore knee-high leather boots, and her red-colored hair was pulled back tightly. She, being among the younger employees, was the only one in the office whose computer was turned on. Though someone had made the decision to modernize the island’s public administration by purchasing computers, it seemed that no one had digitized most of the procedures or instructed the older employees to make use of them. Either my presence made Maria nervous, or she enjoyed playing up the intrigue. We’d have to keep our voices down, she said, or the other workers in the office would know she was helping me. She lit an ultra-thin cigarette. “So you want to know about the blind,” she said quietly. She would take me across the street to the mayor, who would give me more details. I was lucky they were open on this day, she added. Everyone had been on strike the day before to protest salary cuts. She later showed me one of her monthly paychecks. She had cleared about 800 euros, a few hundred euros fewer than what it used to be, she said.

The office of the mayor, Stelios Bozikis, was housed in a large,
columned building with arches in Venetian Gothic style. The island had for centuries been under Venetian rule, and though the old buildings were nearly all destroyed in a 1953 earthquake, the town hall had been reconstructed to resemble the original. The mayor saw me right away. Bozikis had a large nose and a thick, graying beard. He’d formerly been associated with the communist party, but won the mayoral race a year earlier with support from center-left PASOK. He sipped from his coffee, lit a cigarette, leaned back in his office chair, and ran through his fingers a
kombolói,
a string of beads that men in Greece often flick around to pass the time. I turned on my voice recorder, and he began speaking before I could ask any questions. He told me that when he became mayor, he ascertained that a suspiciously high number of Zakynthos residents were taking a blindness benefit at an annual cost to the government of a few million euros. The majority of them were fakes, he said. “I will personally take them all to the district attorney and I will ask for all the money that they took back,” he said. “I’m not retreating. This corruption in Greece can’t continue.” Everything will be “brought to light,” he added, because the path of justice was an obligation. For a Greek politician, he struck me as suspiciously noble. He singled out the former prefect, a member of the center-right New Democracy party, and the local ophthalmologist as the main players in the scheme. The ophthalmologist, he told me, I could find at the hospital. As for the prefect, he’d “gotten lost.”

That turned out not to be true. Later that afternoon I found Dionysios Gasparos, the former prefect, a urologist, in his nearby office on the ground floor of a pink, three-story building with several balconies. Gasparos had been in office for twelve years until 2010, when prefectures were abolished as part of a whittling down of Greece’s multilayered system of regional governance. I rang the bell and Gasparos came to the door. He was a short man with a shock of gray hair slicked back. After I introduced myself,
Gasparos responded in a raspy voice, “I don’t put you down as blind. The ophthalmologist does.” He then stopped and looked around to see if any neighbors were listening. A few dogs barked in the street. He invited me inside.

His office was cluttered with papers and various medical certificates hung on the yellowed walls. It looked like not many patients had been visiting of late. He said he had long called for investigations about the number of blind, and blamed the national health ministry for not responding. “Simply, they are playing political games,” he said of the health ministry. “That’s what you’re going to write.” I dutifully wrote “political games” in my notebook. Gasparos’s signature authorized the benefits, but as he would have me understand it, his signature was only a bureaucratic technicality, one that enabled the money transfers to the beneficiaries, who had already been identified and confirmed as being blind by someone else. “The doctor!” Gasparos said. “Only he has responsibility. The doctor puts you down as blind. Not the prefect.”

“They say that you gave out the blindness benefits in order to get votes,” I said.

“That’s a lie!” Gasparos snapped.

“They also say the doctor took money to write people as blind,” I said.

He paused.

“He took money?” the former prefect said in a much calmer voice. “How would I know? I don’t even know him.” Gasparos reclined in his chair and tossed his
kombolói.
“The others are criticizing him, saying he took money?” he added, as if the possibility of something so devious had not crossed his mind, which would have made him the only person on the island who had not heard about or entertained the accusation.

I had heard by this point that Gasparos had aspirations to run for parliament in the next election. On my way out, I asked him if that was true. “Yes,” he told me, with a bit of hesitation, as if
he were weighing whether it would be a good idea to reveal this information. “I’m considering it.”

The headquarters of the Greek health ministry in Athens is located in a shabby seven-floor concrete building in an area frequented by prostitutes and junkies. When I visited the place around the same time as my trip to Zakynthos, banners and graffiti tags on the wall near the entrance read:
OUR MONEY
,
YOU ALL ATE IT
!!!,
THIEVES
, and
FIVE MONTHS UNPAID
. Like many government ministries during this time, its workers were very frequently on strike, underscoring one of the great difficulties Greece had in fulfilling its reform promises. European policy makers were increasingly complaining that the Greeks were not implementing the reforms they had agreed to in exchange for the bailouts. But how could a government institute reforms when its own workers struck in rebellion against them, and then graffiti-tagged their workplace?