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    Analysis: Greece heads for record books as

    economy slumps

    Tue, Feb 14 2012

    ByAlan WheatleyandScott Barber

    LONDON (Reuters) - Entering the fifth year of recession, Greece is writing its name in the bookof unwanted records for one of the deepest economic slumps of modern times.

    The Greek economy shrank 6.8 percent in 2011, leaving the level of output an estimated 16percent below its pre-crisis peak. Unemployment has soared to more than 20 percent from 7.7percent in 2008.

    Argentina suffered a 20 percent peak-to-trough drop in output as it defaulted on its debts in 2001,while Latvia's economy contracted by 24 percent because of the 2008 global financial crisis.

    With more belt-tightening in store in return for a proposed 130 billion euro ($172 billion)international bailout, Athens is on course to join their ranks, and possibly overtake them, said UriDadush, an economist with the Carnegie Endowment in Washington, a think tank.

    "On the current path - which is not sustainable in my view - we may very well see Greek GDPgo down 25-30 percent, which would be historically unprecedented. It's a disastrous crisis forthem," Dadush, a former senior World Bank official, said.

    For ordinary Greeks, the outlook is dire. Some civil servants have seen their salaries cut by half.Retirement before the age of 65 is a fading dream for those still in work. Some drugs are now inshort supply. Couples with children are being forced to move back in with their parents to savemoney. And across Greece, businesses are closing every day.

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    For a graphic on austeritylink.reuters.com/fub66s

    Interactive timelinelink.reuters.com/muq56s

    Euro zone crisis in graphicsr.reuters.com/hyb65p

    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    A LONG NIGHTMARE

    World Bank figures show that Russian output dropped 44 percent between 1989 and 1998,dwarfing the 29 percent drop in the United States during the Great Depression.

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    But since Russia's economic reversal was compounded by the break-up of the Soviet Union,analysts tend to exclude the episode when examining recent recessions.

    Comparing crises is like comparing apples and oranges. Every country is different, economicallyand politically.

    However, Greece stands out in one important respect: its downturn has already lasted twice aslong as the average crisis and yet there is no end in sight, according to Mark Weisbrot, co-director of the Center for Economic and Policy Research, a think tank in Washington.

    "They're suffering. It's nasty," said Weisbrot, who has studied the lessons to be learned fromeconomic crises in Latvia and Argentina. "If you could say with a reasonable probability that theworst was over, then that would be different. But you can't say that. They're in for a longnightmare."

    Athens has repeatedly frustrated the European Union, the International Monetary Fund and the

    European Central Bank - the troika - by failing to implement the reforms it promised in exchangefor its first bailout, for 110 billion euros, in 2010.

    Apart from missing targets for reducing its budget deficit, Greece has dragged its feet on layingoff workers from its bloated public sector, privatizing state assets and opening up closed tradesand professions to competition.

    Yet one critical measure, the primary budget balance, which excludes interest payments, showsAthens has made serious adjustments by raising value added taxes and cutting pensions, salariesand public services.

    The primary balance was in deficit in 2009 to the tune of 10.4 percent of GDP. This year, it isprojected to show a surplus of 0.2 percent.

    "Although they're not given much credit for what they've done, there are not many countries thathave brought their primary deficit down as quickly as Greece has," said Andrew Kenningham ofCapital Economics, a consultancy in London.

    RUNNING FASTER TO STAND STILL

    And yet Greece will still have an overall budget deficit of 4.7 percent of GDP this year becauseof a huge interest bill.

    This is estimated at 4.9 percent of GDP, rising to 6.3 percent of GDP in 2013, even assumingthat a deal is clinched to write down the bonds owned by Greece's private-sector creditors by 70percent.

    To reduce the overall deficit, the EU and IMF are prescribing an increase in the primary budgetsurplus to 5.0 percent of GDP in 2014 and 2015.

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    "What the troika is effectively working into its plans is an adjustment in Greece that will go onfor many years," Dadush said.

    Weisbrot said the planned interest burden was the highest in the world, except for Jamaica:"These guys are going to squeeze them forever. There's no light at the end of the tunnel."

    Figures compiled by Reuters show that government expenditure and real disposable incomes inGreece have already fallen much further since the onset of the crisis than in fellow euro membersPortugal and Ireland, which have also received EU/IMF bailouts.

    Private consumption has also declined more steeply than it did in Ireland. Yet the IMF and theEU have built into Greece's economic program an assumption that consumption will drop by afurther 4.7 percent in 2012 and 1.4 percent in 2013.

    Unemployment will still be at 18 percent in 2015.

    And the risks - acknowledged by the IMF in its December review of Greece's progress - are onthe downside. If austerity crimps growth and squeezes tax revenues, the budget deficit will beforced higher, requiring a fresh round of belt-tightening.

    That is what happened in 2011. The 6.8 percent drop in GDP reported on Tuesday exceeded the6.0 percent fall that the IMF had penciled in as recently as December. Which itself was arevision from an earlier forecast of a 4.5 percent contraction.

    TO STAY IN THE EURO OR QUIT?

    Countries typically break out of such a vicious circle by devaluing. Output and employment

    initially fall hard but recover rather quickly, as the examples of Argentina, Russia and thecountries hit by the 1997/98 Asian financial crisis showed.

    Indonesia's currency fell by more than three-quarters after it devalued. Swathes of the bankingsystem were wiped out. Millions were plunged into poverty. Yet its peak-to-trough drop inoutput was milder than Greece's. Today, the country is thriving and enjoys, unlike Greece, aninvestment grade rating.

    These and other examples are keeping the question alive whether Greece should quit the eurozone and devalue.

    Ireland and Latvia, whose currency is pegged to the euro, have shown that devaluation is not theonly way out. Competitiveness can also be regained through budget and wage cuts, a so-called'internal devaluation'. Portugal, Spain and Italy are ploughing the same furrow.

    But Weisbrot believes Greece's plight is now so serious it should take the risk and abandon theeuro.

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    "My prediction is that if Greece left they would do quite well, just like Argentina. They wouldhave a brief crisis and would come out of it and grow very rapidly," he said.

    Zsolt Darvas, a researcher at Bruegel, an influential think tank in Brussels, acknowledged thatGreece could be facing one of the deepest falls in output on record.

    But he said the chances of Greece's quitting the euro were low because of the chaos that wouldensue.

    Not only would the government go bankrupt as international lenders withdrew aid, but banks andmost of the private sector would collapse as a steep devaluation of the 'new drachma' wouldmake it impossible to service huge euro-denominated liabilities.

    "So from a purely economic perspective, for Greece it is still preferable to say inside the euroeven if the suffering continues for another five years or even longer," Darvas said.

    Ultimately, though, he added, the question is one for the Greek people and their politicians. Howlong will they put up with austerity? Economic comparisons cannot answer the question.

    Dadush, reflecting on the running battles between police and rioters on Sunday as flamesengulfed downtown Athens, said Greece had stared into the abyss at the weekend.

    "A lot of people were ready to jump. They didn't. But give them another year or two

    Promises, promises... Greece's history of

    missed targetsTue, Feb 14 2012

    ByDina Kyriakidouand Ingrid Melander

    ATHENS (Reuters) - Greece has a long history of promising reforms to its creditors and notdelivering, and this time looks set to be no different.

    The Greek parliament defied violent street protests and voted in even more austerity, but fullyimplementing the measures is likely to prove an impossible task given acrimonious political

    divisions and deep-seated social unrest.

    The package including public sector layoffs, sharply cutting the minimum wage and alreadydwindling pensions, as well as widespread tax increases has unleashed indignant public angerand tested the will of Greek politicians.

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    After decades of using public services as political spoils, the Athens government must also takeon the corruption and inefficiency they fostered before they can implement the reforms thatcreditors demand before releasing further funds.

    "They probably won't be able to implement everything and (April) elections make it more

    difficult," ALCO pollster Costas Panagopoulos said.

    The punishing austerity bill was needed to secure a fresh bailout and avert a messy default thatwould shake the euro zone and comes after two years of wage cuts and tax hikes that haveplunged Greece into its worst recession in decades.

    International lenders, the IMF and the EU, blame the failure of the rescue plan so far on slowimplementation of structural reforms, such as the opening up of markets and professions. Thereis widespread skepticism because of a long history of missed targets.

    "Past history does not give us a lot of hope," said Diego Iscaro of IHS Global Insight.

    "Every time Greece has to receive a tranche of the money we're going to have the same problem.If they keep missing targets, sooner or later they won't get the money. There is a chance this isjust delaying the inevitable."

    Athens says the deeper than expected recession has put it behind agreed targets. Data on Tuesdayshowed the economy shrank 7.0 percent year-on-year in the fourth quarter last year, as thedownward spiral quickened from 5.0 percent in the third quarter.

    "Yesterday's vote in the parliament may have saved the country temporarily from default, but theGreek economy is going bankrupt and the country's political system is failing," said Greek

    Commerce Confederation head Vassilis Korkidis.

    Greece has repeatedly voted in measures and privatizations that have never materialized. It isproving a Herculean task.

    The government has passed laws as many as three times to open up the legal and pharmaceuticalprofessions to more entrants, aiming to make them more efficient and bring down costs, with novisible results, angering reformers as well as creditors.

    The lucrative Greek cruise ship business, crucial to the key tourism sector, still suffers fromrestrictions two years after it was officially liberalized.

    As a result far fewer of the big modern cruise liners moor at Greece's picturesque ports and baysthan for instance in Italy, depriving souvenir shops, cafes and restaurants ashore of armies ofcustomers.

    EU and IMF partners have voiced their exasperation openly, increasingly reluctant to commitanother 130 billion euros to bail Greece out unless political parties clearly back the measureslong term.

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    CLEANING UP POLITICS

    The three-month-old coalition government of technocrat Prime Minister Lucas Papademos, nowbacked by just the main two parties after the far right walked out refusing to vote for the austeritybill, does not have much time left with elections expected in April.

    The conservative New Democracy party is set to win the vote but not outright, risking yet morepolitical paralysis while parties argue over forming a coalition, or a repeat election if they fail.All this will make the political scene unstable for months to come and tough reforms even harderto implement.

    New Democracy leader Antonis Samaras has openly criticized the deal, saying it only plungesGreece deeper into recession and has made clear he wants to renegotiate the terms, addingmeasures such as tax reductions and speedier privatizations.

    Samaras, 60, believes the measures are self-defeating and will not turn the Greek economy

    around, a view increasingly shared among Greeks, especially small business owners who sawSunday's mayhem destroy their last hope of a recovery soon.

    Many economic analysts say the only way Greece can improve competitiveness is to exit theeuro and devalue its currency, doubting a bailout will be fully functioning by the end of 2012.

    Labor and welfare reforms may take years to show results and an ambitious, 50-billion-europrivatization program has proved disappointing, with little prospect of reaching its full potentialsoon as investors keep away from crisis-hit Greece.

    In a first test for parties, before Wednesday's Eurogroup meeting called to approve the fresh

    bailout, Greek political leaders must give concrete assurances they will back the plan after theelection and the government must come up with 325 million euros in cuts to secure aid.

    Government officials said the expulsion of about 40 deputies who voted against the bailout fromthe two main parties was a good omen, cleansing parliament of the main opponents to themeasures.

    "Now we have a dress rehearsal of what the next, two-party government might look like," said agovernment official, who requested anonymity. "With the expulsions, all the populist elementsare gone and there is more hope reforms will be done."

    Sunday's vote in favor of a new wave of austerity was a sign politicians realized they must makea serious effort to tackle the crisis, government officials say.

    But the election may well produce another government which is hesitant to push unpopularreforms through.

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    "There is a risk of a huge swing towards fringe parties and the only way to stop that would be forthe big parties to go back on the agreements they make and the assurances they have given," saidBen May of Capital Economics.

    A recent poll showed Socialist party supporters moving to other groups further to the left, its

    standing down to 8 percent from more than 40 percent in the 2009 election.

    SWELLING UNREST

    But politicians face widespread public anger, evident not just in the angry youths that burned orwrecked 93 buildings in Athens on Sunday night but increasingly among middle-class businesspeople and civil servants who turn out to protest.

    "They should have asked us before voting another round of awful austerity measures that willnever get us out of the crisis," said Persa Lissimakou, 31, a bank clerk, watching fire fighters putout the burning roof of a building. "It's such a shame, especially for the people who worked

    here."

    Athenians held a candlelit vigil outside the historic Attikon theater building, dating to 1870,which went up in flames during the riot and shop owners picked up the pieces of destroyed andlooted shops in the city centre.

    Although the government has said it expects first signs of economic growth in late 2013, afterfive years of recession, unemployment has risen to record highs, the number of homeless andbeggars on the streets of the capital visibly increasing.

    During Sunday protests, police said the usual number of 300-500 black-clad youths that usually

    prompt the violence by attacking police with rocks and firebombs had swollen to 2,000.

    With one out of two youths now out of a job and more and more families having to rely on one,trimmed down salary, social discontent is bound to become explosive.

    "It's not over yet. On the contrary, this was just the beginning and we will see more," said MaryBossis, professor of International Security at the University of Piraeus.

    (Additional reporting by Renee Maltezou; Writing by Dina Kyriakidou)

    Athens mayhem raises fears of Greek socialexplosion

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    Mon, Feb 13 2012

    By Renee Maltezou andDavid Stamp

    ATHENS (Reuters) - Greek political leaders say the nation must accept yet more punishingausterity or face a social explosion, but after a night of violence and destruction in Athens, somepeople fear this explosion may already be about to begin.

    Trade union leader Ilias Iliopoulos condemned the mayhem in which buildings burned acrossAthens as parliament debated new budget cuts but said the government had to listen to thepeople.

    "People sent a message yesterday: Enough is enough! They can't take it any more," Iliopoulos,general secretary of public sector union ADEDY, told Reuters.

    "The social explosion will come one way or another, there is nothing they can do about it anymore."

    Prime Minister Lucas Papademos has repeatedly told his people that however much the budgetcuts ordered by Greece's international lenders hurt, the alternative was far worse.

    He says Greece must avoid going bankrupt at all costs next month when it has to meet 14.5billion euros in debt repayments, and the only way to achieve this is to accept the tough terms ofthe bailout offered by the European Union and IMF.

    "A disorderly default would set the country on a disastrous adventure," Papademos toldparliament. "It would create conditions of uncontrolled economic chaos and social explosion."

    "The country would be drawn into a vortex of recession, instability, unemployment and

    protracted misery and this would sooner or later lead the country out of the euro," he added.

    However, much of this is already happening. Greece has entered its fifth year of recession,unemployment is over 20 percent and life for many Greeks is undoubtedly miserable followingbig pay and pension cuts - with more to come.

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    Likewise, it is hard to argue Greece remains stable. As parliament responded to the primeminister's appeals by endorsing the austerity bill early on Monday, protesters fought pitchedbattles with riot police outside.

    MUCH-LOVED VICTIMS

    By morning, shocked Athens residents gathered outside the burnt shells of buildings, speakingquietly and photographing the rubble-strewn wrecks with their mobile phones.

    "It is very likely that such protests will be repeated because people are very angry," VassilisKorkidis, head of the Greek Commerce Confederation, told Reuters.

    City authorities said 93 buildings were wrecked or seriously damaged. Some were much-loved,such as the Attikon cinema that was housed in a neo-classical building dating from 1870.

    Workers cleared barricades while cleaning crews collected an estimated 40 tonnes of shattered

    marble and stone from the streets and pavements.

    The riots were the worst since 2008 when the police shot dead a 15-year-old schoolboy,provoking weeks of violence.

    Mary Bossis, professor of International Security at the University of Piraeus, said the trouble,which also provoked less serious incidents in towns and cities across Greece, was merely a tasteof things to come.

    "It's not over yet," she told Reuters. "On the contrary, this was just the beginning. We will seemore."

    At the moment relatively small numbers of people get involved in violent protests, many of themyoung but sometimes led by older, radical intellectuals.

    They organize using electronic media including websites which are easy for anyone to monitor."These people are talking openly, they are not hiding at all, but the state is not listening," saidBossis. "If they listened they would know that this was only the beginning and that they want tocontinue."

    While Athens has a long-standing radical community, the riots of the past 24 hours were markedby groups from the provinces converging on the capital to take on the police.

    Injuries were numerous but largely not serious, unlike in May 2010 when three bank workersdied in their burning office.

    "What scares me is that this kind of organized operation may lead to murders. It doesn't surpriseme, it just scares me," said Bossis.

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    With youth unemployment around 50 percent, young Greeks face a particularly bleak future aspolitical leaders say the country will endure a decade of hardship.

    What remains unclear is whether mainstream Greeks will join the radicals in resisting theausterity violently.

    Leftists believe a general uprising is under way. "The Greek people, regardless of ideology, haverisen," said 89-year-old Manolis Glezos, a hero of Greek resistance to the Nazi occupation ofWorld War Two, during the disturbances.

    STRESSFUL LIVES

    Many seem exhausted by more than two years of political, social and economic chaos. They leadstressful lives, constantly worrying about losing their job - if they have one - and how they cancope with tax increases on top of pay and pension cuts.

    Greeks are often bewildered, unable to understand what good the torment they are going throughwill achieve.

    "I wouldn't mind paying for the next two years if I knew austerity would take us somewhere,"said Leto Papadopoulou, 32, a civil servant whose monthly pay has been almost halved to 900euros. "But this crisis seems endless. In 10 years from now, I will be a lost cause for the labormarket," she told Reuters as she watched a recent protest.

    Those who argue that the deal with the EU and IMF has saved the country from a socialexplosion, rather than hastened it, say that chaos among the general population could have comein the form of panic rather than violence.

    "Just imagine the state of chaos that Greece would have been in today," former minister AdonisGeorgiadis, who defied his far-right party to vote for the package, told Mega TV.

    "Just imagine if the loan agreement had not passed, we would have thousands of people outsidebanks trying to get their money, thousands of people rushing to the supermarkets."

    If Greece were to suffer a major breakdown of law and order, the government would need anabsolutely loyal police force. Riot police has fought countless battles with protesters in the pastfew years, but its biggest union said the force also had its limits of tolerance.

    "We refuse to stand against our parents, our brothers, our children," the Greek Police Federationsaid.

    (Additional reporting by Harry Papachristou and Tatiana Fragou Editing by Maria Golovnina)

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    yErik Kirschbaum

    ATHENS | Sat Apr 28, 2012 9:27am EDT

    (Reuters) - On Monday, a 38-year-old geology lecturer hanged himself from a lamp post in

    Athens and on the same day a 35-year-old priest jumped to his death off his balcony in northernGreece. On Wednesday, a 23-year-old student shot himself in the head.

    In a country that has had one of the lowest suicide rates in the world, a surge in the number ofsuicides in the wake of an economic crisis has shocked and gripped the Mediterranean nation -and its media - before a May 6 election.

    The especially grisly death of pharmacist Dimitris Christoulas, who shot himself in the head on acentral Athens square because of poverty brought on by the crisis that has put millions out ofwork, was by far the most dramatic.

    Before shooting himself during morning rush hour on April 4 on Syntagma Square across fromthe Greek parliament building, the 77-year-old pensioner took a moment to jot down a note.

    "I see no other solution than this dignified end to my life so I don't find myself fishing throughgarbage cans for sustenance," wrote Christoulas, who has since become a national symbol of theausterity-induced pain that is squeezing millions.

    Greek media have since reported similar suicides almost daily, worsening a sense of gloomgoing into next week's election, called after Prime Minister Lucas Papademos's interimgovernment completed its mandate to secure a new rescue deal from foreign creditors by cuttingspending further.

    Some medical experts say this form of political suicide is a reflection of the growing despair andsense of helplessness many feel. But others warn the media may be amplifying the crisis moodwith its coverage and numbers may only be up slightly.

    "The crisis has triggered a growing sense of guilt, a loss of self-esteem and humiliation for manyGreeks," Nikos Sideris, a leading psychoanalyst and author in Athens, told Reuters.

    "Greek people don't want to be a burden to anyone and there's this growing sense ofhelplessness. Some develop an attitude of self-hatred and that leads to self-destruction. That'swhat's behind the increase in suicide and attempted suicide. We're seeing a whole new category:

    political suicides."

    Police said the geology lecturer, Nikos Polyvos, who hanged himself, was distraught because ateaching job offer had been blocked due to a blanket hiring freeze in the public sector.

    NATION IN SHOCK

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    Experts say the numbers are relatively low - less than about 600 per year. But increases insuicides, attempted suicides, the use of anti-depressant medication and the need for psychiatriccare are causing alarm in a nation unaccustomed to the problems.

    Before the financial crisis began wreaking havoc in 2009, Greece had one of the lowest suicide

    rates in the world - 2.8 per 100,000 inhabitants. There was a 40 percent rise in suicides in thefirst half of 2010, according to the Health Ministry.

    There are no reliable statistics on 2011 but experts say Greece's suicide rate has probablydoubled to about 5 per 100,000. That is still far below levels of 34 per 100,000 seen in Finland or9 per 100,000 inGermany. Attempted suicides and demand for psychiatric help has risen asGreece struggles to cope with the worst economic crisis since World War Two.

    Nikiforos Angelopoulos, a professor of psychiatry, has a busy psychotherapy practice in anupmarket Athens neighborhood. He said the crisis has exacerbated the problems for somealready less stable people and estimates that about five percent of his patients have developed

    problems due to the crisis.

    "We're a nation in shock," he said, even though he suspected that it was the media coverage ofsuicides that had increased dramatically rather than the actual numbers of suicides. Henevertheless says the crisis is behind a notable rise in mental health problems in Greece.

    "I had one patient who came in with a severe depression - he owns a furniture making companythat got into financial trouble and he had to lay off 20 of his 100 workers," he said. "He couldn'tsleep and couldn't eat because of that. He said his good business was being ruined and hecouldn't cope anymore."

    The furniture maker spent four months in therapy and was also helped by anti-depressants,Angelopoulos said.

    "He's better now. He realized what happened just happened. But there are many others who areunstable or psychotic to begin with and the crisis is increasing their anxiety and insecurity."

    Angelopoulos, 60, has also suffered himself because about 20 percent of his patients can nolonger afford his 100 euro ($130) per hour sessions. Some have asked for a half-price discountwhile others tell him they simply can't afford to pay anything.

    "I never turn people away," he said. "If a patient says to me 'I have no money', I couldn't tell

    them to go away. I tell them okay you don't have to pay now but remember me later."

    HAPPY GREEKS?

    There are several possible explanations for Greece's low suicide rate that go beyond the fact thatthe country has an abundance of sunshine and balmy weather.

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    To avoid stigmatizing their families, some suicidal Greeks deliberately crash their cars, whichpolice often charitably report as accidents. Families often try to cover up a suicide so their lovedones can be buried because the Greek Orthodox church refuses to officiate at burials of peoplewho commit suicide.

    Another important factor behind the low suicide rate is that Greeks have extremely close knitfamilies as well as a highly communicative and expressive culture.

    "Greece is a country where everyone will talk to you," said Sideris, the Athens psychoanalyst."You'll always find someone to share your suffering with and someone's always there to help.

    "It's not only the good weather. It's the powerful network of support that has made the suiciderate in Greece so low. It's still there but this crisis is still too much for some people."

    Many Greeks have also not lost their sense of humor.

    Dimitris Nikolopoulos, a 37-year-old salesman, laughed at the idea that the suicide rate was solow because Greeks are well-adjusted and a generally happy people.

    "Greeks used to be very happy people because we were living off money that didn't belong tous," he said with a wry smile. "But sometimes you have to face reality. It wasn't our money."

    ($1 = 0.7542 euros)

    Full Focus

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    4. Romney backer sees treason, Obama's campaign cries foul07 May 2012

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    5. "The Voice" set to crown a winner07 May 2012

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    Watched

    Hungry zoo lion faces off with unfazed toddlerThu, May 3 2012

    "The Avengers" breaks a record, Lohan off the hookSun, May 6 2012

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    Landslide hits Tibet highwayMon, May 7 2012

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    The "Run for Your Lives" race has runners facing obstacles while being chased by zombies.Slideshow

    Greek families forage abroad to stay afloat in

    crisis inShare2 Share this Email Print

    Analysis & Opinion

    Never mind the pain, feel the austerity Portugal doesnt require Greek remedy for now

    Related Topics

    World Lifestyle Greece

    By Li-mei Hoang and Renee Maltezou

    LONDON/ATHENS | Tue Apr 24, 2012 10:02am EDT

    (Reuters) - The wistfulness in the voice of George Kapetanios is heart-warming and anincreasingly familiar tone for Greek families at home and in cities all over Europe and the worldthese days.

    Put out of business by a shrinking economy that has been crushed by the eurozone crisis, unableto find work at home and desperate to stay afloat financially, Kapetanios, his wife KaterinaGermanou and daughter Paraskevi came to London months ago so the parents could find workabroad.

    Now they are hoping for a brief taste of their former family life when stepson Thanos Kehagias,who has remained inGreeceto finish his university studies, comes for a visit.

    "I've met people here from all over the world, who say I've not been back for seven years, notbeen to see my mum for seven years, I don't do that," Kapetanios told Reuters in London. "I don'tlive like that. We (Greeks) are very close with family."

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    In Munich, Maria Zatse dreams of work and frets about improving her faltering German. The 49-year-old was a hairdresser in her native Greece for 30 years.

    Then the eurozone crisis hit. The construction company where her husband Niko worked wentbankrupt in 2010 and he lost his job. They struggled along on her income for a while before

    business at her salon dried up. Then they sold their house and moved toGermanyin search ofwork.

    "People didn't have any money," she said.

    The story for the Kapetanioses and the Zatses is being replayed for Greek families all overGreece and Europe.

    About 600,000 jobs in debt-riddled Greece have disappeared since 2008 and economic outputhas shrunk by around 20 percent. So far, more than a fifth of all Greeks are unemployed, creatingan army of jobseekers spreading out across the European Union and beyond.

    ONE MEAL A DAY

    Some 7,000 Greeks have come to Germany in the past year, according to its Federal StatisticsOffice. The number of migrants from other debt-stricken countries -- Spain, Portugal orItaly--has been significantly less.

    The tale for young Greeks is just as dire in a country where one in two cannot find a job.

    George Kapetanios' stepson Thanos Kehagias said he has made peace with his parents' decisionto take his sister and leave him behind while they made a new start in London.

    The 23-year-old stayed to study engineering at a state university in Patras, Greece's third largestcity. He said he lives on just over 6 euros ($7.87) per day and can only afford one daily meal atthe cheap university restaurant.

    "I weighed 97 kg but have lost weight, I'm now almost 70," he told Reuters in Greece. "I can'tafford to order food or eat out."

    Although he struggles to make ends meet and is afraid that the university may shut down due tothe budget cuts, he said he was not prepared to join his parents and sister in London.

    "My parents' move was not a bad one, at least they make some money there. And my sister isgoing to school there and is a good student," Thanos said.

    Life is perhaps a bit tougher for Maria Zatse's 15-year-old daughter Margarita, who hopes tofollow her mother into the beauty trade.

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    Within a month of moving to Munich all their money was gone, spent on hotels and guesthouses.Maria still has no job and Munich is one of the most expensive cities in Germany. Niko hasfound modest work at a printers.

    The family slept in Munich's central station for 10 days, before they got accommodation in a

    hostel in Aubing, in the west of the city, through a social worker. Maria, Niko and Margaritanow live, eat and sleep on a tiny bit of floor space.

    Three beds, three lockers and a little table complete the room. Clothes, hand towels and otherbelongings are piled up on the chairs, things they have salvaged from their old lives.

    In the corner, an image of the Madonna stands on a shelf, next to family photos. Maria's brotheremigrated to Italy, only her father refused to leave Greece. She telephones him regularly, but hecan only visit once she gets more space.

    SONS AND MOTHERS

    In London, George Kapetanios is reminiscing about the old life in Greece and how quickly 15years of work and family life evaporated in the crisis.

    "Where I live is a small village, a small town. Nine, ten thousand people. I couldn't find a jobanywhere," he said.

    Faced with crippling taxes imposed as part of the government's austerity measures to appease thefinancial markets, a deteriorating health system and massive unemployment, Kapetanios said hehad little choice but to leave.

    But the move has been hard on his wife Katerina.

    "She has a really big problem with leaving our son behind. Because you know, mum and son.But what can she do? She knows we don't have a chance back there. No chance."

    Kapetanios and his wife both work part time, he as a chef in a restaurant and her in a caf in westLondon. It's a far cry from the enviable life they had a few years ago in Greece when they had asuccessful restaurant and owned three cars.

    Post-eurozone crisis he faced losing everything he had. The restaurant was not doing well, andhe was unable to find a new job. He rents out their house and sold the restaurant, but still cannot

    afford to make the monthly 800 euro mortgage payments.

    Now he works in London at a Greek restaurant after arriving by himself and living for the firsttwo or three months without the family in London.

    "I was alone and it was really bad. But it wasn't London's fault. It was my psychology that wasreally bad. Because when you feel alone and doing what I'm doing now, you think I don't haveanything here, I don't know anybody."

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    Kapetanios says he dreams about moving back to his hometown, back to his mother, father andsister and his friends whom he left behind but realizes this is just a romantic notion.

    "I speak with people every day in Greece. They tell me: George, you do your best. Don't doanything stupid and be romantic and sensitive and say I'm coming back to live here.

    "Don't do that. You'll regret it".

    ($1 = 0.7619 euros)

    (Additional reporting by Irene Preisinger in Berlin, editing by Paul Casciato)

    By Harry Papachristou

    ATHENS | Fri Apr 20, 2012 2:48pm EDT

    (Reuters) - Close links between the Greek state and the Orthodox Church are turning from ablessing for the clergy into a curse as the debt-laden government struggles to fund the ancientinstitution, just as impoverished Greeks need its charitable work most.

    Starved of money as the state makes huge spending cuts, the deeply conservative church whichgrew from one of the earliest centers of Christianity is seeking new sources of funds.

    But despite a new spirit of enterprise, such as at one monastery which wants to build a solarenergy farm, numbers of priests are dwindling, those that remain are suffering pay cuts, and thechurch is fighting to keep soup kitchens open as unemployment soars and poverty deepens.

    "The tills are empty and the system is collapsing," said Ignatios Stavropoulos, a modernizingpriest who has his own page on LinkedIn, a social website for professionals.

    Under a 60-year-old treaty, the state agreed to pay priests' salaries in exchange for large amountof church property, including land. But this means more than 10,000 priests are now on thegovernment payroll, putting a 190 million euro ($250 million) annual burden on the country'soverstretched budget.

    Under the terms of an international bailout that savedGreecefrom bankruptcy, the governmentis cutting pay which for a typical parish priest is about 1,000 euros a month. Athens will alsofund only one new priest to replace every 10 who retire or die, causing shortages in remote

    parishes during a deep recession when the flock most needs help.

    In the cities, the church has stripped operations to the bone to save money for the soup kitchensand charities it runs for the growing army of the homeless and the unemployed.

    Unlike in some European nations to the north where the influence of religion is dwindling, thechurch plays a leading role in the life of the Greece.

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    Long-bearded priests, dressed in flowing black robes, are a common sight on the country's streetsand the Orthodox faith is recognized by the constitution as the official religion. When a newgovernment was sworn in last year, the Archbishop of Athens blessed the prime minister andcabinet in a colorful ceremony.

    According to opinion polls, about 80 percent of respondents believe in God. This makes Greeksamong Europe's strongest Christians, although many are infrequent church-goers.

    MIXED FEELINGS

    In a country where private charities and volunteering remain embryonic, the main burden ofhelping the destitute and downtrodden falls on church shoulders.

    But attitudes towards the church are mixed and it often draws criticism for being too close to thestate.

    Many citizens believe it still owns too much property, pays too little in taxes, and generally failsto contribute its fair share as ordinary Greeks' tax bills soar under the austerity demanded by thecountry's bailout from the EU and IMF.

    The church dismisses such notions. "It's a myth that we're drowning in money," said FatherIrinaios Laftsis, a priest in the northern diocese of Alexandroupolis.

    Over the past decades the church has transferred 96 percent of its property to the state. It alsopaid 12.6 million euros in taxes in 2011, it said last month, stressing that the church was treatedno differently from any other non-profit organization.

    To cover the shortage of priests, some bishops are permitting laymen to take services. Thesevolunteers receive no state wages and don't wear the characteristic vestments.

    For instance, a retired army officer recently started holding mass at Avantas, a village close tothe eastern border withTurkey, said Father Irinaios. "Priests in small villages retire or pass awayand there is nobody to replace them," he said. "We are going to have a huge problem."

    The church is already slashing its operating expenses to cope with the rising costs of its socialwork. Last year, it spent almost 96 million euros on the 700-odd charities it runs.

    "The crisis does not only affect our charities' functioning, it also threatens their very existence,"

    Bishop Efstathios of Sparta said earlier this month. State pension funds had stopped payingcontributions to the charities he runs for almost a year, he complained.

    Building or restoration work on churches, some home to ancient frescoes and ikons, has oftenground to a halt while many are not properly heated during the harsh Greek winter to cut back onfuel expenses.

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    Economies are being made at all levels. Church orders for candles dropped 40 percent this Easterseason, a religious items merchant in the southern province of Arcadia told Reuters.

    OFF THE AIR

    In February, the church briefly took its 23-year-old, cash-strapped radio station off the air,depriving listeners of the daily mix of sermons and cultural programs.

    Spreading poverty is making matters even worse. Austerity-pinched believers are cutting downon private donations while businesses are going belly up, depriving the church of rental incomeand swelling the queues in its soup kitchens.

    "Needs are increasing while resources are falling," said Father Vassileios Hatzavas, who runs theAthens Archbishopric's poor relief fund.

    As Greek unemployment soars to record levels, soup kitchen rations more than doubled in

    Athens last year to about 10,000 a day, not counting about 3,000 food packages sent to familieseach month, Hatzavas said.

    As the government tightens its purse strings, the clergy are increasingly looking to alternativerevenue sources.

    Short of cash and with much of its still abundant real estate tied up in ownership disputes, thechurch is seeking cooperation with municipalities, the army or private business to develop sites,Hatzavas said.

    For the first time, the church sent an official delegation last month to a religious tourism fair in

    Russia, the world's biggest Christian Orthodox country and a major tourism target. Also, Pentelimonastery outside Athens is planning to build a solar park to tap into subsidies for renewableenergy producers.

    Some priests may have gone too far in their fund-raising zeal, such as Efraim, abbot of the 1,000-year-old Vatopedi monastery.

    Efraim masterminded a scheme six years ago under which monks at the monastery on MountAthos, a independent Orthodox peninsular enclave, persuaded government officials to exchangecheap farmland for prime Athens real estate.

    Efraim has been charged with a fraudulent deal which prosecutors say cost the state tens ofmillions of euros.

    Notwithstanding the Vatopedi affair, the crisis is offering the church a chance to reduce itsfinancial dependence on the state via legitimate business enterprises, as other churches diddecades ago.

    "It's a matter of survival for the Church," Stavropoulos said. ($1 = 0.7621 euros)

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    (editing by David Stamp)

    One in five Greeks unemployed, half of all

    youthThu, Apr 12 2012

    By Harry Papachristou

    ATHENS (Reuters) - Greece's jobless rate rose to a record of 21.8 percent in January, twice ashigh as the euro zone average, statistics service ELSTAT said on Thursday, as the debt crisis andausterity measures took their toll on the labor market.

    Youth unemployment remained at levels where more are jobless than in work.

    Budget cuts imposed by the European Union and the International Monetary Fund as a conditionfor saving the debt-laden country from a chaotic default have caused a wave of corporateclosures and bankruptcies.

    Greece's average annual unemployment rate for 2011 jumped to 17.7 percent from 12.5 percentin the previous year, according to ELSTAT figures. December's rates was 21.2 percent.

    For the second consecutive month, those aged between 15-24 years were hit hard.Unemployment in that age group stood at 50.8 percent, twice as high as three years ago.

    Greece's economy is estimated to have shrunk by about a fifth since 2008, when it plunged intoits deepest and longest post-war recession. About 600,000 jobs, more than one in 10, have beendestroyed in the process.

    A record 1.08 million people were without work in January, 47 percent more than in the samemonth last year, according to ELSTAT figures. The number in work dropped 8.6 percent to arecord low of 3.88 million.

    As an increasing number of people claim unemployment benefits, the government is finding itincreasingly difficult to meet its budget targets.

    The finance ministry announced on Wednesday that the deficit of its central government budgethad widened by 53 percent in the first quarter, compared with a target to narrow it by 38 percentin the full year.

    For many of those still in work, the situation is also worse.

    Under the terms of its EU/IMF bailout, the country's second since 2010, Greece slashed itsminimum monthly wage by about a fifth to about 580 euros ($760), gross, to encourage hirings.

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    Starting this month, Greek unemployment figures are being adjusted for seasonal factors. Theaverage jobless rate in the 17 countries sharing the euro rose slightly in January to 10.7 percent,from 10.6 percent in December.

    (Reporting by Harry Papachristou. Editing by Jeremy Gaunt.

    (Reuters) - In a bid to raise cash, Greek police are offering a 30 euro ($39) per hour "cop-for-hire" scheme for private companies or citizens seeking protection at special events.

    Police said the service was provided only under special circumstances, such as cases of high-security risk, and that revenues would be used to fund police equipment and boost the statebudget. It used to be available for free before a debt crisis hit the country.

    "We will provide these services only in exceptional cases and only if we have the availableassets and staff. We'll first make sure that no citizen is deprived of police protection," policespokesman Thanassis Kokkalakis said on Tuesday.

    Hiring a police officer for an hour costs 30 euros, according to the law, which has entered intoforce. A police vehicle escort, for example for the transfer of art works or other sensitivematerial, will cost an additional 40 euros per hour and a motorcycle escort 20 euros.

    For larger-scale operations, police patrol boats can be hired for 200 euros and helicopters for anhourly 1,500-euro fee.

    Along with other public sector workers, Greece's 55,000 police officers have suffered wage cutsand layoffs amid austerity measures imposed by international lenders in exchange for financialaid.

    Full Focus

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    153One in seven thinks end of world is coming: poll

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    Greek suicide a potent symbol before election

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    UPDATE 4-Greek pensioner kills himself outside parliamentWed, Apr 4 2012

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    Analysis: Resistance to austerity stirs in southern EuropeSun, Apr 1 2012

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    UPDATE 2-Greek parties say election likely to be on May 6 -sourcesTue, Mar 27 2012

    Analysis & Opinion

    For Europe, it doesnt get better Will Greek CDS ever trade again?

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    By Renee Maltezou

    ATHENS | Thu Apr 5, 2012 4:21pm EDT

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    (Reuters) - A Greek pensioner's suicide outside parliament has quickly become a symbol of thepain of austerity and has been seized upon by opponents of the budget cuts imposed by Greece'sinternational lenders.

    The 77-year-old retired pharmacist, Dimitris Christoulas, shot himself in the head on Wednesday

    after saying that financial troubles had pushed him over the edge. A suicide note said hepreferred to die rather than scavenge for food.

    The highly public - and symbolic - suicide prompted an outpouring of sympathy from Greeks,who set up an impromptu shrine on the spot where the pensioner died

    On Thursday, hundreds of Greeks - including students, teachers, members of leftist groups, andthe "Indignants" who held daily sit-ins for months last year - staged a second day of protests atthe shrine, leaving flowers and candles.

    Late in the day, minor clashes broke out between a small group of demonstrators and police, who

    fired tear gas. A peaceful demonstration was also held in the city of Thessaloniki.

    The newspaper Eleftheros Typos called Christoulas a "martyr forGreece". His act was imbuedwith a "profound political symbolism" that could "shock Greek society and the political world"before an upcoming parliamentary election that will determine the country's future.

    Anger over the suicide was directed as much at politicians as at the harsh austerity prescribed byforeign lenders in return for aid to lift the country out of its worst economic crisis since WorldWar Two.

    "It's horrible. We shouldn't have reached this point. The politicians in parliament who brought us

    here should be punished for this," said Anastassia Karanika, a 60-year-old pensioner.

    So far this week, police reported that at least four people have tried to kill themselves because offinancial troubles.

    In one case, a 35-year-old cafe owner in central Greece was hospitalized on Tuesday afterdrinking pesticide because he feared his business would be seized by his bank.

    With the election expected on May 6, smaller parties opposed to harsh spending cuts included inthe country's second bailout were quick to blame bigger parties backing the rescue.

    "Those who should have committed suicide - who should have committed suicide a long timeago - are the politicians who knowingly decided to bring this country and its people to this stateof affairs," said Panos Kammenos, a conservative lawmaker who recently set up the IndependentGreeks anti-austerity party.

    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Interactive timeline on austerity protests:

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    link.reuters.com/pys56s

    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    SHAME ON THEM

    Smaller parties like the Independent Greeks have been riding high in opinion polls before theelection at the expense of the two main ruling parties, the conservative New Democracy andsocialist PASOK, which backed the bailout.

    The two big parties are together expected to take less than 40 percent of the vote. Losing morevoters to the smaller parties could mean they will not have enough seats in parliament to forge apro-bailout coalition again.

    That would have profound implications for Greece's finances as continued aid from the EuropeanUnion and the International Monetary Fund depends on the next government pushing through

    reforms.

    "The main issue is not the suicide itself but the reasons behind it," said Thomas Gerakis from theMarc pollster group. "The problem is far more serious than a single suicide. It shows that there isa serious - and growing - problem of people in despair."

    New Democracy and PASOK, which have ruled Greece for decades, expressed their sorrow overthe tragedy. Political opponents attacked them for joining in the mourning.

    "Shame on them. The accomplices responsible for the suffering and despair of the Greek people... should at least keep quiet in the face of the hideous results of the capitalist crisis and their

    policies, instead of pretending to be saviors and sensitive," the KKE Communist party said.

    Resentment is rising in Greece over repeated wage and pension cuts that have compounded thepain from a slump which has seen the economy shrink by a fifth since 2008.

    The IMF, which is unpopular among many Greeks, said it was saddened by the pensioner'sdeath.

    The number of suicides jumped 18 percent in 2010, and many Greeks feel ordinary people likethe retired pharmacist are being forced to pay for a crisis not of their making.

    "When dignified people like him are brought to this state, somebody must answer for it," saidCostas Lourantos, head of the pharmacists' union in the Attica region.

    (Additional reporting by Angeliki Kountantou in Athens andLesley Wroughtonin Washington;Writing byDeepa Babington; Editing byJanet McBride,Elizabeth PiperandGiles Elgood)

    Poverty-stricken Greek town hits new low

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    Fri, Mar 30 2012

    By Deborah Kyvrikosaios

    PERAMA, Greece (Reuters) - A "humanitarian crisis" is unfolding in an impoverished Greek

    city where a deepening economic crisis has left thousands seeking food from an internationalcharity more used to helping refugees and bringing aid to famine or disaster zones.

    Once home to a thriving shipbuilding industry, the port city of Perama near Athens has seen itsfortunes wane over the years as buyers abandoned it for cheaper options outside Greece.

    The country's financial crisis is the latest blow - pushing up unemployment in the area to 60percent, triple the national average.

    Without health insurance or money for fees at state facilities, many of the town's 25,000residents have begun flocking to a free clinic set up by Doctors of the World seeking medical

    care and, lately, staples like milk and bread.

    The clinic was set up two years ago to treat poor immigrants. Instead, it now finds that 80percent of its patients are Greeks struggling to get by. Doctors say many of them cannot evenafford the bus fare to the local hospital.

    "We tell a lot of people that come here: 'Your child needs to go the hospital, we can't treat theproblem here,' and they tell us: 'I don't have the 1.40 euros to take the bus and go to thehospital,'" said Liana Maili, a paediatrician at the clinic.

    A large chunk of the town's residents live on less than 200 euros ($270) a month, the agency

    says.

    "There are some families that have not had electricity for five, eight months, who spent thewinter burning pieces of wood to keep warm and whose children eat from the garbage."

    Lately, the clinic has been overwhelmed with vaccination requests for Greek children whoseparents cannot afford booster shots - something the agency has only ever seen in the developingworld, said Nikitas Kanakis, head of the agency's Greek arm.

    "We will need the help of other organizations as we are in a humanitarian crisis," he said.

    FOOD PARCELS

    Greece is struggling through a debilitating debt crisis that has forced it to accept financial aid tokeep afloat. The aid comes at the price of painful wage and spending cuts that have helped pushthe country into its fifth year of recession.

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    Most Greeks have felt the pain of salary and pension cuts and higher taxes, with towns likePerama showing the extremes of a crisis that social workers say has punished the weakestsections of society.

    In the clinic's small waiting room, patients outnumber the available seats as they wait to be seen

    by a doctor or pick up a free meal box of beans, olive oil, pasta and condensed milk.

    Unable to find a steady job for five years, Antonis Giatras relies on the clinic to feed his familyof five. He recalls once being forced to live in his car and in a cemetery for months when he washomeless with a pregnant wife.

    "There are some days when we have no bread, or food," said the 50-year-old Giatras. "My youngdaughter who goes to school is forced to go some days without taking any food with her."

    In a one-room shack with a ceiling damaged by water and held together with bits of rope andwood, 36-year-old Spiridoula Firlemi lives in fear her electricity will be cut off because she

    cannot pay back power bills of 1,250 euros.

    "They'll cut it off. We'll see, maybe I'll get electricity from a neighbor," said Firlemi, who has a45-day-old baby.

    "I can't leave the baby in the cold." ($1 = 0.7509 euros)

    Greek town withers as boom turns to bust

    Sun, Mar 4 2012

    By Renee Maltezou andDeepa Babington

    KOMOTINI, Greece (Reuters) - Decades ago, Antonis Seitanidis' family fled Asia Minor tosettle in the northern Greek town of Komotini in search of a better life.

    Today, he is urging his grandchildren to abandon the town - a place that once gave him hope butis now ravaged by factory closures, a lack of jobs and rising anger.

    http://blogs.reuters.com/search/journalist.php?edition=us&n=deepa.babington&http://blogs.reuters.com/search/journalist.php?edition=us&n=deepa.babington&http://blogs.reuters.com/search/journalist.php?edition=us&n=deepa.babington&http://blogs.reuters.com/search/journalist.php?edition=us&n=deepa.babington&
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    "This is the worst crisis I can remember in at least 50 years," the 84-year-old said. "I have fivegrandchildren and three of them are unemployed. I tell them to leave the country - to go toGermany or Australia. People will help them there. I don't understand, what are they waiting for?The end?"

    Things in Komotini appeared to hit rock bottom last week, when an unemployed man burst intothe factory that laid him off and shot his former boss and another worker, injuring them both.

    Stunned disbelief soon turned into sympathy in a town where one in four residents isunemployed.

    "After the initial shock, many people sympathize with this man," said George Petridis, the localmayor. "I'm afraid we can't sink any lower than where we are right now."

    With a sizeable Muslim minority and economic problems that began several years before thedebt crisis emerged in the rest of Greece, Komotini has a complex history that sets it apart from