FROM the empty shops, to the half-full theatres, restaurants and hotels, the signs are everywhere: economic crisis is biting hard in Greece. ''People have no money,'' says Yannis Barbas, the owner of a once popular but now eerily quiet taverna in Corfu.
Greece's financial tsunami has been unexpectedly sudden. Despite the concern long raised abroad about the perilous state of the eurozone member's public finances, it has taken much longer for the same alarm to sound in Athens.
''Our politicians like to cover things up,'' said Gerasimos Papafloratos, who runs a tourist shop in the city. ''They have failed to implement the right policies for our economy, education and health and, in the case of the last [centre-right] government, actually went out of their way to hide the scale of our debt and deficit.''
Greeks know that hiding is no longer an option. In the wake of revelations that the deficit stood at 12.7 per cent of GDP last year, over four times the permissible EU level, the severity of the situation has not been lost on them.
As proud members of the eurozone, with the drachma consigned to history and the prospect of devaluation and printing their way out of the crisis also ruled out, the penny has finally dropped that something has to be done.
Last week, under pressure from markets and the EU and citing soaring borrowing costs, the Prime Minister, George Papandreou, announced a raft of ''painful but necessary'' reforms, broadening a belt-tightening rescue plan already put before the EU. The measures, focused on public sector cuts and tax increases, broke with almost every pledge he made before his election in October.
But Mr Papandreou, who has not been afraid to air Greece's darkest ills - the corruption, cronyism and deceit - may have turned the corner.
Polls suggest that most Greeks agree that sacrifices have to be made. One indicated that most also disagreed with the stance of trade unions and public-sector employees who have vowed to oppose the policies.
Mr Papandreou, who is poised to announce social security reforms and tax increases, homing in on doctors, lawyers, and nightclub owners, who are among the biggest tax evaders in an underground economy estimated to be about 30 per cent of GDP, has found help from an unlikely quarter.
Amid all the talk of bankruptcy and bailouts, conservative opposition party leaders have backed the measures as imperative for the survival.
Yiannis Voulgaris, a political scientist, said: ''At times of crisis and decline, the instinct of 'national survival' is activated.''
Mr Papandreou has pledged that Athens will reduce the deficit below 9 per cent this year, and reach the European Central Bank's target of 3 per cent in 2013.
For the government, the test will be as much political as economic. Convincing Greeks of the need for modernisation to restore the country's battered international credibility will be crucial. ''The key to success lies in structural reform, in changing the system and how it works,'' says Paschos Mandravelis, a political commentator.
Mr Papandreou faces a staunch adversary in the form of an increasingly militant left, fiercely opposed to any reform and able to mobilise thousands on the streets.
After riots in 2008, and an upsurge in violence since, the socialists face an uphill battle to avoid further unrest. Mass strikes are planned for tomorrow and on February24 .
Guardian News & Media
