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Debt deal or not, for many Greeks, the damage is already done (+video)

Greece is effectively postponing a payment of $1.8 billion to the IMF, as it continues debt talks with its creditors. Even if a deal is struck, Greeks must contend with the scars left by five years of recession.

Before Greece's debt crisis, Tota Petropoulou never imagined that her life could come tumbling down around her. She owned her own pharmacy, and had a stable and comfortable life that made her happy. 

Then in 2010, the government began delaying payments for medications covered by state-subsidized health insurance. In 2012, it stopped payments altogether.

Ms. Petropoulou tried to save her business – borrowing from family and friends, moving to a smaller apartment, selling her furniture – all to no avail. The government never paid, and her pharmacy went bankrupt. In the process, she lost everything. 

Greece's leaders and the country's international lenders have been scrambling this week to reach a last-minute deal to avoid a default. On Thursday, Greece jolted European investors by saying it would defer a payment due today to the International Monetary Fund and instead repay it a lump sum of $1.8 billion on June 30. Technically this isn't a default, but it underscores the country's precarious finances and the urgent need to reach a deal that would unlock more money for Greece. 

Greeks are watching anxiously from the edge of their seats. Yet for all those who worry about what happens if Greece can't strike a deal, for many the damage to society is already done after five years of recession.

Petropoulou is not sure that a deal will affect her at all. “I have already been destroyed, so I don't have a lot to lose,” she says with a resigned smile.

After she lost her business, she was unemployed for a year and a half. She then found a part-time job, paying about a third of her previous salary. She now shares an apartment with her two daughters, who are jobless, and her boyfriend, to whom she can't afford to get married, she says. 

Overworked, underpaid

There were hints this week that a deal would emerge between Greece's creditors and the government, led by the leftist Syriza party that won January elections. But it is unclear whether members of the party that came to power on an anti-austerity platform will accept the reforms demanded by European creditors in order to release an additional $8 billion loan. Without this money, the $1.8 billion owed to the IMF seems unlikely to be repaid on June 30. 

The recession has taken a heavy toll on both individuals and society. Nikos Bountouroglou is a radiation oncologist at the Metaxa cancer hospital, a public institution, outside Athens. Normally around a quarter of his salary comes from working overtime, but he and the other doctors at the hospital have not been paid overtime since January, though they continue to work the extra shifts. The drop in income means his family no longer spends on extras like eating out, and focuses on the basics instead.

But he is far more worried about the state of his hospital than his own income. “You wouldn't believe the conditions we're working under,” he says.

In the past five years, the hospital's budget has been reduced, while its patient load increased, he says. The institution is understaffed, so much so that patients are not able to get timely appointments. And it's lacking in important equipment, including some of the items necessary for Dr. Bountouroglou to make accurate diagnoses.

Yet even if Greece receives the bailout funds, he's doubtful he will see a difference in his hospital, because he believes his government is looking out for the interests of the wealthy few, not the majority.

Trickle-down debt

Of course, many in Greece have much hanging on the outcome of the negotiations. By the end of June, the government will owe Ekter construction company 5.8 million euros for public works projects it hired the company to build, according to Athanasios Sipsas, the company's president. Ekter will stop work on the projects this month, and unless a deal is struck, it will likely never see that money. That would force Ekter to fire the 300 employees working on the projects, which include public hospitals and a student dormitory.

Inex, a family-owned company that sells disposable medical products, is also waiting eagerly to hear of a deal. Already struggling because of the haircut on bonds it was forced to take, the company is now dealing with invoices unpaid since February for products it provides to public hospitals. “We work on good faith,” says Managing Director Eleftherios Apostolou. “If we stopped providing goods because we didn't get paid, hospitals wouldn't have anything.”

The company has 15 employees, and has not yet fired any. But if Greece and its lenders don't reach a deal, says his son George Apostolou, sales and marketing manager, “we will lose our money and everything will collapse.”

The uncertainty weighs heavily on their business, says the elder Mr. Apostolou. “The most important thing is we don't know if tomorrow will be the drachma or the euro. So how can you make plans with this uncertainty?”

Petropoulou, the pharmacist who lost her business, found her footing again by helping others. She began volunteering at what she calls a “social pharmacy,” where doctors and pharmacists volunteer their time and people donate medicine for the needy. Helping people helped her recover, she says.

“For the first time, I felt I wasn't alone. I met so many nice people, working for free. … It's like a rainbow on a rainy day.”

Eleftheria Astrinaki contributed to this report.

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