Greek Crisis Exacts the Cruelest Toll

HERAKLION, Greece—The first time he despaired of his debts, Vaggelis Petrakis drank a poisonous brew of beer and gasoline.

By MARCUS WALKER for the World street Journal

 

A note he left didn’t mention the financial woes of his fruit and vegetable business, of which his family was well aware. Instead, he left instructions for his children on how to look after his animals. “Put mother rabbit in a different place from the little rabbits,” the note began.

Then he had second thoughts and called his son, Stelios, who took him to a hospital. Mr. Petrakis survived that suicide attempt. But Greece’s collapsing economy and the ruin of his business would soon push him to a more determined effort.

“It was shame, fear, pride, dignity,” says his son. “Whoever you ask, they will say he was a man of dignity.”

Two years into Greece’s debt crisis, its citizens are reeling from austerity measures imposed to prevent a government debt default that could cause havoc throughout Europe. The economic pain is the price Greece and Europe are paying to defend the euro, the centerpiece of 60 years of efforts to unite the Continent. But as Greece’s economy shrinks, its society is fraying, raising questions about how long Greeks will be able to take the strain.

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Gross domestic product in the second quarter was down more than 7% from a year before, amid government spending cuts and tax increases that, combined, will add up to about 20% of GDP. Unemployment is over 16%. Crime, homelessness, emigration and personal bankruptcies are on the rise.

The most dramatic sign of Greece’s pain, however, is a surge in suicides.

Recorded suicides have roughly doubled since before the crisis to about six per 100,000 residents annually, according to the Greek health ministry and a charitable organization called Klimaka.

About 40% more Greeks killed themselves in the first five months of this year than in the same period last year, the health ministry says.

                                                                                                  Associated Press

Police sprayed a man who set himself afire in Thessaloniki, Greece, on Friday. The former small-business owner, who said he was ruined after taking on a series of bank loans, survived.

Others have attempted suicide. On Friday, Greek police said, a man in his 50s struggling with his debts was hospitalized after setting himself on fire outside a bank branch in the northern city of Thessaloniki.

Suicide has also risen in much of the rest of Europe since the financial crisis began, according to a recent study published in the British medical journal The Lancet, which said Greece is among the hardest hit.

While some countries have higher rates of recorded suicides, including the U.S.’s over 10 per 100,000, mental-health professionals here say Greece’s data greatly understate the incidence of suicide because it carries a strong stigma among Greeks. The Greek Orthodox Church forbids funeral services for suicides unless the deceased was mentally ill. Families often mask suicide deaths as accidents.

A suicide help line at Klimaka, the charitable group, used to get four to 10 calls a day, but “now there are days when we have up to 100,” says a psychologist there, Aris Violatzis.

The caller often fits a certain profile: male, age 35 to 60 and financially ruined. “He has also lost his core identity as a husband and provider, and he cannot be a man any more according to our cultural standards,” Mr. Violatzis says.

Heraklion, commercial center of the island of Crete, has had a spate of such deaths.

Mr. Petrakis, the fruit and vegetable dealer, was just one of three recent suicides at a single wholesale food market on the edge of the city.

Victims once were typically adolescent males or old people facing severe illness, and in normal times suicide cases often involve a mixture of factors including mental illness, says local psychiatrist Eva Maria Tsapaki.

But the economic crash has created a “new phenomenon of entrepreneurs with no prior history of mental illness who are found dead every other week,” she says. “It’s very unusual.”

Part of the explanation, some locals believe, lies in the nexus of a burst credit bubble and the Cretan male identity. They say the island’s history of rebellion against foreign occupiers, from Ottomans to Nazis, has entrenched a cultural ideal of male strength and pride.

“Our pride is as high as Psiloritis,” the island’s tallest mountain, says Yiannis Tsevabinas, a local lawyer. The culture breeds confident, extroverted and adventurous characters, he says, “but when pride is lost, it can also make you vulnerable.”

                                                     Vaggelis Petrakis took his own life.

Petrakis Family

For Mr. Petrakis, a burly, mustachioed man of few words, a local custom of free-flowing, often informal lending kept his business afloat for years. But after Athens in late 2009 disclosed a budget deficit far worse than previously reported, touching off the Greek debt crisis, he found himself squeezed between banks that would no longer lend and customers that could no longer pay.

Mr. Petrakis grew up in a poor olive-growing community in the mountains of Crete. As a small boy, he walked from village to village selling loukoumi sweets, similar to Turkish delight, from a homemade wooden box.

“He always kept the last and best piece for me,” says Georgia Petrakis, who was growing up in the same rural district. “We were in love since we were children.”

When she was 18, they married and moved to town. Mr. Petrakis worked day and night selling livestock feed from a truck, and would fall asleep exhausted while cradling their infant son. He found a job working at the wholesale food market and began to save to buy his own store.

Finally, in 2000, when he was 47, he managed to combine his savings with a bank loan and launch his own wholesale food business. “We felt we had almost made it,” Mrs. Petrakis says.

Life was getting better. Greece adopted the euro. The economy thrived. The family sold produce to hotels and supermarkets. Mr. Petrakis bought some land in the mountains, where he kept animals and liked to relax.

But the hotels and supermarket chains often paid late. They gave small suppliers such as Mr. Petrakis postdated checks that couldn’t be cashed until months later.

This practice had long existed in Greece, but it exploded when it became a credit-driven economy in the 1990s, says Constantine Michalos, president of the Athens Chamber of Commerce and Industry.

Small businesses had little choice but to accept payment this way. In doing so, they were in effect acting as banks, lending to their own customers for several months for no interest.

“This was a para-banking system of enormous size. It is one of the main reasons for the crisis,” Mr. Michalos says.

Small businesses struggled with cash shortages because they had to pay their overhead when due, but wait months for hard cash from customers. Mr. Petrakis managed the same way other small entrepreneurs did: To get money quickly, he took his customers’ postdated checks to banks and sold them at a discount.

If he had a check for €1,000 that couldn’t be cashed for five months, a bank would give him €800 right away, then another €100 on the date the check became cashable, his lawyer, Aggelos Zervos, says. The bank would keep the remaining €100.

Though this gave Mr. Petrakis the cash he needed, it ate into his revenue and margins. “Without realizing, we were slowly going bust,” Mrs. Petrakis says.

Then, after Greece’s debt bubble burst, these postdated checks started bouncing frequently, including checks written by Mr. Petrakis’s customers.

Some were longstanding friends. One was a relative who owned a supermarket. When Mr. Petrakis asked the customers to pay up after their checks bounced, they refused or made him wait longer, often bluntly telling him it was his problem, Mrs. Petrakis says.

“People he thought were friends changed their behavior,” she says. Her husband had always been “very correct,” and was dismayed by constantly finding himself arguing with old business partners. “He became more and more withdrawn.”

Through the years, Mr. Petrakis had taken out extra bank loans, bringing his total bank debt to around €600,000, or about $850,000.

Now he began falling behind on loan payments. Banks were threatening the family with forced sales of their assets, including their home.

In desperation, Mr. Petrakis turned to a harebrained scam. In spring 2010, he obtained a fake postdated check in the name of an Athens company with which he had no dealings. He tried to sell it to a bank at a discount in the usual way.

Mr. Petrakis knew the check would bounce when it matured in the fall, and the bank would come to him wanting its money back, but he hoped by then to have money to repay the bank, says his lawyer, Aggelos Zervos. “He knew this was not right. All he could gain this way was time,” the lawyer says.

The bank spotted the fake and called the police, who arrested Mr. Petrakis and searched his house. There they found his father’s old World War II rifle, a common memento here, and charged him with possession of an unlicensed gun as well as financial fraud.

“Vaggelis was so ashamed, he couldn’t look me in the eye,” his lawyer says.

He was freed pending trial. A local newspaper wrote about a “check forger.” Mr. Petrakis wasn’t named, but “word got around,” Mrs. Petrakis says. “We felt ostracized.”

It was in July of last year that her husband first tried to take his own life by swallowing gasoline. In the hospital, his wife told him, “I don’t want you to do this ever again.” He promised not to.

“We’ve been through so much, we’re going to make it,” she told him while lying in bed at night. He agreed.On his first day back at the fruit and vegetable market, however, he got into a loud argument over money with an orange grower. The man called him a “crook,” says a fellow grocery wholesaler who came to his defense.

“For Vaggelis to be called a crook here at the market was a big offense. I would have killed the guy,” the fellow wholesaler says.

Mr. Petrakis turned pale, took his car keys and drove off. His wife ran behind the car, screaming for him to stay. His family searched for him throughout the day and night.

Mr. Petrakis collected his hunting rifle from home and wrote farewell notes over four pages of an old calendar. The banks had destroyed him, he wrote, and he had lost his honor over the check affair. He warned that others on Crete would suffer his fate.

“Please forgive me,” he wrote. “I love you very much.”

At 5 a.m., Mrs. Petrakis heard her husband’s dog whimpering in an olive grove by the field where he kept his animals and used to go for peace of mind.

In the dark, she tripped over him beneath an olive tree. He was still alive but, with a gunshot wound in his head, could no longer speak. He died in her arms.

Source:

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