Sun sets on the Greek way of life

The Greek islands still feel a world away from the politically-charged atmosphere of Athens, but with the country's rich growing poorer and tourism under threat, the crisis is drawing ever closer, writes CARL O'BRIENin Mykonos, Greece

IT DOESN’T strike you as an obvious bolthole for Greece’s jet set on first glance. With its bald, rocky hills and tufts of scrubland, Mykonos seems hard to love.

But as you nose around the pristine white sandy beaches, decadent restaurants and designer properties dotted around the coast, it begins to make sense why parts of this island are the country’s answer to St Tropez.

Down the labyrinth of narrow, white-washed side streets are tiny boutiques selling Chloé handbags and Rolex watches. There is a host of pricey and achingly cool dining options, like Nobuyuki Matsuhisa’s exclusive sushi empire, Nobu. At the property agents there are tasteful villas for sale, but only if you have between €1 million and €25 million to spare.

Mykonos is about 150km from Athens. But this week – with temperatures reaching 30 degrees and an impossibly turquoise blue sea lapping in the harbour – it feels a world away from the rage, violence and death which shook the streets of the Greek capital recently. But, for some of its wealthy residents, it is beginning to feel a lot closer than it has ever done before.

Many of Greece’s richest – those in the wealthy suburbs of Athens trying to hide their earnings and swimming pools from the taxman; those with the shimmering palaces built in contravention of planning laws here on Mykonos – have had little reason to fear the law.

That is beginning to change. Many of the elite realise the demonstrators who shouted “traitors, traitors” and smashed their way through jewellery shops and banks in Athens are also directing their anger at them. There is, in the eyes of many, a golden circle of politicians, shipping magnates, industrialists and bank chiefs who stand accused of robbing the rest of society. Theirs – so the argument goes – is wealth created by controlled and untaxed business activity, nepotism, a corrupt political system and a compliant media.

At the quayside, Spiros Geralis, 49, is doing a slow but steady trade selling souvenirs to day-trippers who’ve arrived from a large cruise boat in the bay. He’s annoyed that ordinary workers are being made to pay for the actions of the wealthy elite who have contributed to ruining the country.

“You see that villa on the hill over there?” he says, pointing to a white cubist mansion. “That’s owned by one of the wealthiest people in Athens. There are lots of questions about these people, sure. Not all, but many of them. Anyone who was a friend of the government? They did well. They were looked after.” Some of these beautiful – but in some cases illegally built – trophy homes are, to many, emblems of what has gone wrong in Greece.

As long ago as the late 1980s, planning officials said development had reached saturation point on Mykonos. Yet, the construction of holiday homes continued, often breaching regulations over size or proximity to the shoreline.

WHILE THE SIGNS of wealth abound in Mykonos and across parts of Greece, little of it shows up in government coffers. Last year, only several thousand people out of a population of 11 million declared an income of more than €110,000. Incredibly, Greece actually lost ground in collecting taxes, even as the economy was booming. An EU report on Greece tax shortfalls found that between 2000 and 2007, the country’s average growth was around 8.25 per cent. Its taxes grew at just 7 per cent.

“Among the self-employed in particular – like the doctors, architects, engineers, plumbers – tax evasion is very widespread,” says Costas Bakouris of the Greek arm of the non-profit group Transparency International. His organisation, as well as others, estimate that about one-third of income generated in the country is not declared. This equates to lost tax revenue of around €20 billion – money which would go a long way to help lifting the country’s back-breaking debt burden.

Bakouris says: “There are cases of doctors claiming annual incomes of €15,000, yet they have a swimming pool, a boat in Pireas [the port of Athens], a holiday home. How can you do that with €15,000? It’s impossible.”

In recent weeks, government officials have taken to using satellite images from Google to examine people’s assets, such as swimming pools in wealthy suburbs of Athens. The more devious and cunning haven’t taken long to respond: the local media say some are using large sheets of tarpaulin to hide their swimming pools from the eye of the taxman.

Yet the reality, one not readily conceded by angry groups on the street, is that tax evasion and petty corruption are a way of life. While protesters express outrage at the government and other elites, they, too, are part of the problem. Instead of rejecting the black economy of bribes and backhanders, they have learned to live with the system.

“At the end of the day, it takes two to tango,” says Constantine Kamaras, a best-selling author and observer of Greek society. “For every corrupt politician that bought a vote by hiring someone into the public sector, there was a citizen who accepted that job and sold off his vote. These jobs were often under scandalous terms, with very little work.”

For ordinary people, they feel backhanders – or fakelaki, Greek for "little envelope" – are a necessary evil to grease the wheels of bureaucracy. "In Ireland, you have good schools, you have good health services, good public services," says shopkeeper Spiros Geralis. "Here, we don't. So you need to pay that extra. What else can you do?"

Kamaras insists people should look inwards and address the cancer of corruption and bribery at the heart of society. “It’s extraordinary,” says Kamaras. “We always find someone else to blame, except ourselves. It’s either a neighbour, or foreign powers, the Americans or dark centres of power envious at the ‘cradle of civilisation’. This nonsense still permeates a large part of Greek society.”

The Greek government – mainly due to the EU and IMF breathing down its neck – is taking action. New tax laws mean those in certain occupations will have to start using cash registers and give out printed receipts.

Among the higher earners, the Greek finance ministry says it is now using a range of technology to check income declarations. It is also approaching luxury stores – such as car dealerships – to check with lists of their clients. “In the coming weeks,” Greek finance minister Ilias Plaskovitis told a US newspaper, “we are going to be closing down companies, restaurants and doctors’ offices because they have not paid taxes.”

There are other reasons why violence on the streets of Athens could cast a shadow over Mykonos and other Aegean Sea islands. They, like much of the country, are heavily reliant on tourism. The sector employs one-in-five people nationally and is the biggest source of income. But the images of riot police, burning cars and threats of national strikes could take a heavy toll on tourist numbers – just when the country needs them most.

These are uncertain times for tourism. Riots in the capital nine days ago resulted in the cancellation of some 12,000 hotel rooms in Athens alone. “That wasn’t so bad, all told,” says George Drakopoulos, head of the Association of Greek Tourism Enterprises. “But what we can’t measure is how many people will decide not to come here because of the situation.”

He is trying to help spread the word that Greece is open for business. But he admits it isn’t an easy sell. Last week, striking port workers prevented 900 Spanish tourists rejoining their cruise ship in Athens.

“That was bad, but things are calming down,” Drakopoulos insists. “The legislation [for austerity measures] is passed. The international money has arrived. The worst is over. The islands are a world away from what happened in Athens.”

Yesterday, there was little to suggest tourists were being scared away. Many of those who arrived in Mykonos – en route from Athens – were initially worried about stopping in the Greek capital, but ended up being surprised at the calm that met them.

“We saw the pictures on the telly and we were concerned,” said Patricia Maguire from Portmarnock, Co Dublin, who was on a cruise with her sister. “But when we walked around yesterday, it was fine. There was no sign of any trouble.”

“The people on our cruise were told we could stay on board in Athens if we wanted,” said Bobbie Bookhout from Arizona, who is holidaying with her husband John. “We went out, like most people, and had a wonderful time.”

THE TOURISM PR battle is only a short-term problem. The challenge of rebuilding a fairer and more equitable society in Greece is one which could take generations. Opinion is divided on whether the country can pull through.

Ian Gourley, a Greek resident for almost 20 years and president of the Hellenic Irish Business Association, is hopeful. “Katharise, or cleansing, is common in Greek tragedies. It’s a period of renewal and change. Previous governments and the electorates have never owned up to their responsibilities. They went from mini-crisis to mini-crisis. Now, it’s backs-against-the-wall time. But, in my experience, the Greeks perform well under pressure.”

In recent years, Greek tourism authorities have been marketing the country with the slogan “Live your myth in Greece”. It’s oddly appropriate to some. They feel the country, with its unsustainable public spending, laissez-faire attitude to tax and refusal to confront ugly realities, has been living a myth for too long.

“You know, every country has its myths,” says Constantine Kamaras. “Our modern myths – in terms of our self-perception, our national ideology – are totally unsuitable for our future. We can’t sustain that any longer.”