KIFISIA, Greece - This upscale suburb of Athens offers a snapshot of a country sliding toward bankruptcy. It's an ugly picture, as expectations of prosperity and stability vanish and fear begins to take over.
The trendy shops in the town center looked empty during a visit this week; many stylish restaurants were said to be closed or open only on weekends; banks here, as everywhere in Greece, have been depleted over the past month by a riptide of withdrawals.
I'm here visiting Yannos Papantoniou, an old friend from graduate school who served as Greece's minister of economy and finance from 1994 to 2001. Those were the years when everything seemed to be going Greece's way. The deficit fell sharply, inflation declined and real incomes and investment increased. Greece was struggling (maybe too hard) to make the numbers for inclusion in the European common currency. Next came the euro in 2002, the 2004 Olympic celebration -- and then eventual disaster as Greece had to pay its debts.
Greece is a morality play in the usual telling of the European economic crisis: It's seen as a country that elbowed its way into the eurozone and treated the new currency as a German-backed credit card. After living so far beyond their means, the Greeks are getting what they deserve, it's argued. Even those who scold Germany's Chancellor Angela Merkel for recommending austerity therapy have little sympathy for the Greeks. The country seems almost like a debtor's prison, with angry creditors jeering at its demise.
This day of reckoning for Greece may be necessary, in economic terms. But it doesn't take account of the social cost of the unraveling here and in other distressed European nations. The norms of middle-class life that people here took for granted are beginning to come unstuck.
I gathered some loose anecdotal examples of what the recent upheaval feels like in Kifisia and, presumably, a hundred other places like it. Burglary is said to be on the rise, so many residents are adding new security to their homes. Some have purchased guns to protect their property -- quite unusual in this cosmopolitan suburb.
Local firms are shrinking amid the double-digit economic downturn. Construction companies are concentrating on overseas jobs and laying off domestic workers. The tourist industry has suffered this summer as vacationers canceled plans because of fears of disruption and unrest if Greece abandoned the euro.
It's a classic Keynesian downturn, says Papantoniou. "Failure breeds more failure."
With less money to spend, many Greeks are delaying paying their bills or simply defaulting. And because everyone is angry with the government, Greece's already egregious problem of tax evasion is getting worse.
At a local doctor's office, it's said that than an embarrassed physician's assistant tells patients there is a dual system: If the patient wants a receipt, the fee is 150 euros; if it's a cash transaction without documentation, the visit will cost just 100 euros.
Even the off-books "black economy" is in trouble. With so little work, the illegal immigrants who once rushed to Greece are going home. The traffic is all outward bound, including money. According to Papantoniou, bank withdrawals were running an estimated 500 million euros a day in late May and early June, rising to 1 billion a day immediately before the June 17 parliamentary election. The pro-euro party won, but this hasn't done much to restore confidence that Greece can avoid default.
What went wrong? Papantoniou offered this diagnosis in a recent economics paper: "Selfish interest prevailed. Business groups attempted to capture specific markets. Public-sector trade unions fought for preserving privileges. Tax discipline was further weakened. The welfare state was transformed into a system of endemic waste." As the economy went haywire, support for the two major political parties collapsed.
Eerily, when I hear people describe the downward spiral, it reminds me of descriptions of Germany at the end of the Weimar Republic, on the eve of the Nazi rise to power. The European parties that seem to be benefiting most from the current turmoil are those on the extreme right and left.
That's not a prediction, mind you, just the observation of a worried traveler who likes Greece and wants to see it get healthy again, but can't yet see a cure. This patient is going to get sicker for a while longer, and it's hard to know whether the acute stage of the crisis that precedes recovery will be economic, or political, or both.
David Ignatius writes about foreign affairs for The Washington Post. He can be contacted at: