Greece faces regular strikes and go-slows in private companies, strikes by power workers and lawyers and taxi drivers and tax collectors, and another public service strike looms on Thursday.

Riot squads are on stand-by at critical intersections in the capital, and regularly unleash their batons and tear gas. Anarchists are bombing racist groups and right wingers are blowing up refugees.

All these expressions of rage, with the exception of the bouts of political violence, the origins of which predate the current crisis, stem from the fact the Greek government is virtually broke, owing the world 300 billion euros (roughly $450 billion) and is having to pay an enormous premium to keep rolling over the loans.

Consequently the government has imposed a series of austerity measures which will slash public services, cut wages and allowances, raise taxes and delay pensions.

As the Greek newspaper Kathimerini reports, prime minister George Papandreou told parliament “The measures we have taken hurt, but think of what would have happened if we had gone bankrupt… the average Greek and the weak would have been hurt.”

However, the strikers are telling the PASOK (Socialist) government they are already hurting.

Greece is in recession and the economy could shrink by 4 per cent this year; Greeks are desperately worried about how much more pain they will have to endure.

For it seems almost inevitable now, with a flying squad of International Monetary Fund (IMF) inspectors digging into the government’s books in Athens, Greece will ask for as much as 15 billion euros ($21.89 billion) in emergency IMF funding.

The European Union has belatedly and very reluctantly offered another $30 billion rescue package, though they have only done so because the euro is wobbling and there are considerable fears of Greek contagion to other debt heavy Club Med economies like Spain and Italy.

Greek banks are experiencing capital flight and are seeking access to emergency government funds, while households cheques are bouncing all over the country.

Root causes

The ABC’s Foreign Correspondent program has sought to get beyond the statistics to focus on the root causes of Greece’s problems.

In every conversation with Greeks about the current financial crisis, from the street view to the boardroom, inevitably they would invoke the word “trust”.

And they use it in the negative. Simply put, the current day citizens of the world’s most ancient democracy have a deep distrust of the institutions of the state that are meant to serve them.

This absence of “trust” is then used to justify almost everything from bad driving to tax evasion to direct political action, including, at the extreme end, a wave of bombings.

Dig a bit deeper and it becomes clear this distrust of government is age-old, stretching back decades including those times when Greece was led by prime minister Papandreou’s father, Andreas, and before him grandfather George, among others in the political establishment.

In recent years there were two political scandals which have had Greeks shaking their heads.

The Siemens case, where the German telecommunications company was bribing politicians of both major parties to secure government contracts, and the Vatopedi affair involving an exchange of lands between the government and the Greek Orthodox Church, enriching middlemen and robbing taxpayers.

While investigations continue into both scandals there is no public confidence that the full truth will ever be revealed or that politicians involved will be held to account.

Moreover, Greeks feel short changed on basic services.

Christos Kyriakousis, a taxi driver who has worked with Foreign Correspondent a number of times in recent years, says “They ask me to pay more money and nobody knows where it goes.

“No money goes for education, no money goes for the medical system, no money goes for retirement but we still have to pay more and more money every day. ”

The conundrum is that services are failing despite Greece having an extraordinarily large public service, numbering by some counts more than a million people at national and local level, one in six of all wage earners.

The adjectives that tend to be attached to the public service are “bloated”, “inefficient” and “corrupt”.

Black economy growing

At the big end of town there is despair.

Costas Bakouris has been a fixture in the Greek corporate world for decades.

In his role as the Greek head of Transparency International, a global civil organisation dedicated to increasing government accountability and curbing corruption, he says the basic issue is “traditionally there was not a lot of confidence between governments and citizens”.

This breakdown is reflected in two structural and inter-related impediments to a well functioning economy – tax avoidance and corruption.

Mr Bakouris says more than a third of Greece’s gross national product is unregulated and untaxed.

“The black economy I used to estimate to be about one third of our gross national product,” he said.

“The latest information I just received from the bank, it is 37 per cent, which is quite significant which means that our undeclared GNP is anywhere between 80 to 100 billion [euros - $116 to $146 billion] more than what we officially declare, ” Mr Bakouris said.

To try to capture more of this black money the government has flagged some much overdue reforms. From 2011, no financial transaction of more than 1,500 euros ($2,189) will be regarded as legal if it is paid in cash.

The top rate of the three-tier value added tax has been raised to 21 per cent and there is a lure to stop the rich holding money offshore – if bank deposits are repatriated within six months there will be a five per cent tax and no questions asked.

Transparency International lists Greece as the most corrupt nation of the 16 European nations which make up the eurozone.

Mr Bakouris says, “Well the estimate for what I call petty corruption, which is fakelaki, is around 800 million euros ($1,167 million) a year, which is a significant amount.”

In fact he points to surveys which show that on average Greeks pay out about $1,977 in fakelaki payments – small bribes – per year, often to government bureaucrats, to speed up the processing on an application or a permit.

Tax auditors have a particularly bad reputation for taking payments to make problem disappear.

Survival

At a street level, Christos Kyriakousis has a much more sanguine view of fakelaki. He says it is about family survival.

“The way I look at it with the fakelaki, with bribing somebody. If someone works in the public sector, OK he’s got a family behind him,” he said.

“He makes like 600, 800, 1000 euros a month. How are you going to support your family with 1000 euros a month? You can’t so you have to find different ways. You have to get your fakelaki.”

For Greek Australian entrepreneur Nick Geronimos, who has spent eight years building up a backpacker and studio apartment business in Athens, fakelaki is an unfortunate part of doing business.

“You think, am I going to stay in business? Or am I going to play the game as the particular public servant wants,” he said.

“You just have to, you’ve got no choice. We don’t call it fakelaki. The expat Australians call it a facilitation fee.”

Greeks, it can be reasonably predicted, face some difficult years.

The country desperately needs the sort of structural and micro-economic reforms that Australia went through in the ’70s and ’80s.

It needs full scale tax reform and a much greater commitment to chasing tax cheats among the self-employed and professional classes (doctors have the worst reputation).

The goal needs to be an accountable and transparent government.

If reforms can be made there is just a chance that trust could be rebuilt between government and the governed.

However, for all of its problems there is much to be said for Athens in the spring where the sky is blue, the light is golden, there are ruins to be explored and museums to get lost in, cafes are bustling, you can eat and drink well and relatively cheaply and the summer tourists are yet to arrive.

Besides which, you would be doing your bit for the Greek economy.