“I’m not going to pay it,” Ms. Firigou, 50, said matter-of-factly, as she lighted a cigarette and checked her ringing cellphone to avoid calls from her bank about late payments on a loan. “I can’t afford to pay it. They can take me to jail.”
While banks and European leaders hold abstract talks in foreign capitals about the impact of a potential Greek default on the euro and the world economy, something frighteningly concrete is under way in Greece: the dismantling of a middle-class welfare state in real time — with nothing to replace it.
Since 2010, the government has raised taxes and slashed pensions and state salaries across the board, in an effort to rein in the bloated public sector that today employs one in five Greeks. Last week, the government announced it would put 30,000 workers on reduced pay as a precursor to possible termination and would cut pensions again for nearly half a million public-sector retirees.
A clerk in her local town hall, Ms. Firigou, like all public-sector workers, took a precipitous pay cut last year — in her case to less than $1,300 a month from $2,000 a month — as the government slashed wages to meet the terms of its foreign lenders. Her husband, who sells used car parts, has seen his commissions drop. Her mother’s pension was cut to about $800 a month from around $920.
Like many families here, the Firigous cushion the impact of such cuts and the rising cost of living with property acquired in the past. Her grandfather built the two-story apartment house in this Athens suburb, Psychiko, where the six now live, starting in the 1930s and finishing it after the Second World War. And so the new tax, probably in excess of $2,000 per year for the Firigous, stings particularly hard. “The house is the only thing we have left,” she said.
There is a lot for Greeks to swallow. Beyond the public-sector wage cuts, in recent months the government has also imposed a “solidarity tax” ranging from 1 to 4 percent of income on all workers and an additional tax on self-employed workers, who make up the bulk of the economy. It has also raised its value-added tax on many goods and services, including food, to 23 percent from 13 percent.
The economy is flagging, and it is not uncommon for even private-sector workers to see pay cuts of 30 percent or more, sometimes in exchange for a reduction in working hours.
The so-called troika of foreign lenders — the European Central Bank, the European Commission and the International Monetary Fund — is increasingly playing hardball with the Greek government, insisting it meet its deficit-reduction goals before it decides whether to release the next installment of $11 billion that Greece needs to meet expenses starting in mid-October.
Many Greeks fear a vicious circle: a death spiral of more austerity measures, further economic contraction and correspondingly lower tax revenues, making it that much harder to make a dent in the debt, pushing the country toward default in spite of the austerity. Unions have called general strikes for Oct. 5 and Oct. 19, and tensions are building.
Economists say the measures are necessary to bring down debt and modernize Greece’s economy. But the cuts have come far faster than the modernization, and the social fabric is starting to fray — if not tear. The unemployment rate, already at 16 percent, and emigration are increasing; the birth rate is dropping; and the rate of suicide is rising. The education minister recently apologized that public schools lack textbooks, and the country’s morale is flagging.
“The government is increasingly at war with the citizens,” said Jens Bastian, an economist at the Hellenic Foundation for European and Foreign Policy in Athens. “It is taking decisions whose consequences are not only squeezing the middle class, but threatening its very existence.”
Some private-sector workers say they have not been paid in months. “It’s illogical and unfair,” Aphrodite Korogiannaki, 38, a speech pathologist at a center for intellectually disabled youth, said of the property tax as she participated in a peaceful demonstration in Athens last week. “If I haven’t been paid for two months, how can I pay?”
A growing number of Greeks are asking that question, and increasingly their anger is focusing on the proposed property tax, the one that Mrs. Firigou insists she cannot pay.
The government has said it expects to raise $2.7 billion through the tax, which would affect an estimated 5.5 million homeowners. (There is no precise number for Greek homeowners since the country still lacks a comprehensive land register.) According to the Hellenic Property Federation, an association representing Greece’s homeowners, the tax would cost an average family between $1,200 and $2,000 extra per year.
Niki Kitsantonis contributed reporting.
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