Avoiding the Harsh Reality: Many Greeks Blame Foreigners for Their Crisis

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Trangas is great at posing questions, but less great at answering them. "I don't understand at all how a European politician like Chancellor Merkel could allow the IMF, under the influence of the Americans, into the euro zone," he says. "What business does it have being here?"

But when asked what the alternative would have been, he does not provide an answer but merely says: "The fact the IMF is here and is demanding measures under the influence of the Americans is providing fuel for the protests." Anti-American sentiment, something that has long been very popular in Greece, is flourishing anew these days -- and it is now fuelling the arguments of those who oppose the rigorous austerity program.

The secret of one section of Greek society is to blame others or create myths in order to avoid the harsh reality. For example, people -- including serious journalists, politicians and entrepreneurs -- could be heard everywhere claiming it was actually "provocateurs" who were to blame for last week's arson attacks, rather than irresponsible rioters -- despite the fact that the perpetrators had actually been seen. They also accused the government of being involved, saying it had wanted to discredit the protesters.

What Greece Must Change

But that's just the way Greece is in times of crisis. And that is also what makes even well-meaning observers less inclined to believe that Papendreou's government can achieve success through its seriousness and obstinacy.

At the end of the day, cost-cutting will not be enough. The Greek state needs a massive increase in its revenues, and that will also be a test of character for the country. Greater revenues also means greater honesty when it comes to taxation as well as working to reduce the black market for labor, increasing consumption, stopping the flight of capital outside the country, making the country more competitive, reducing corruption, fostering growth and eliminating the shadow economy. How Greeks address these issues will determine whether the country can turn itself around or whether it has already fallen into the abyss.

As part of that, the Greek government needs to make it understandable to people why the austerity measures and structural changes are needed. Media figures who can get that message across to the general public will be needed. There also needs to be credible examples.

And they do exist, suggests the 50-year-old economist Jens Bastian. He works for the Hellenic Foundation for European and Foreign Policy (ELIAMEP), where he is responsible for research on southeast Europe and Greece. He considers the painful incursions planned by the government to be "socially balanced." For example, he says, the reduction in bonuses given to civil servants, which are equivalent to two extra months of pay each year, is being made dependent on a person's salary.

He says other examples also suggest the government is acting credibly. As an example, he cites the government's action to crack down on thousands of unregistered private swimming pools surrounding the capital city.

In the affluent northern suburbs of Athens, only 324 homeowners have voluntarily registered their swimming pools with the tax authorities. In reality, however, there are known to be 16,974 private swimming pools in Athens' suburbs. But homeowners withhold the information in order to keep the value of their homes artificially low in order to save on property taxes, or, in some cases, because they have been built illegally. The government has now said it will reassess the value of those properties -- and most homeowners can expect hefty additional tax bills.

'Greece Is Far Too Expensive'

Another decisive issue for the success of the restructuring program is whether the Greek government can generate new and lasting growth. But in that regard, too, Bastian, who has lived in Greece for 13 years, is also optimistic. He sees considerable potential in the planned liberalization of the labor market.

In Greece, many professions considered to be self-employed, including architects, lawyers, doctors, pharmacists, taxi drivers and transport companies, are "organized in a cartel-like manner," Bastian says. "They were closed professions." These barriers will now be "removed," he says, something that will create "future opportunities for young people" and greater competition.

"Until now, it has been cheaper to get a container filled with construction materials from China to Athens than it was to transport one from here to Rhodes," explains architect and construction entrepreneur Gerasimos Drimaropoulos.

The country has also "strongly neglected" to secure foreign direct investment since 2004, says Bastian. The economist sees great opportunities in that area. The precondition for that, however, is that Greece finally pay its overdue bills.

On top of all that, the country needs to become cheaper. "Greece is far too expensive," Bastian says. "That is the everyday experience of Greeks, and also of foreign tourists." He says that prices are starting to move now, and he predicts that there will be a clear "downward adjustment of prices" in the coming months.

Those are the kinds of forecasts that radio host Georgios Trangas likes to hear. He believes his country mainly needs two things: time and confidence. "The Greeks are fighters," he says. "As a rule, they are successful in difficult times." Whether that applies in this case too remains to be seen.

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• Part 1: Many Greeks Blame Foreigners for Their Crisis
• Part 2: Spinning Myths out of a Deadly Protest