In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell. Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro. If the exact economic impact of such a move is hard to nail down - newly issued drachmas devalued by up to 70 percent, runaway inflation, a banking meltdown, a collapse in trade - the implications for ordinary Greeks crushed by the debt crisis are even harder to predict. Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow. After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month's time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way. A Greek exit from the 17-nation euro zone, or «Grexit» as some economists have called the once unthinkable eventuality, risks turning the nation into what would be close to a failed state on the edge of the European Union, one of the most prosperous societies the world has ever known. Greece imports 40 percent of the food it consumes, nearly all of its oil and natural gas and much of its medicine. It has long been clear to some commentators that there could be trouble ahead. Confronted with post-exit turmoil, foreign suppliers would simply put up the shutters until the situation becomes calmer, leading to acute shortages of basic commodities, which could fuel serious civil unrest, according to Bank of Greece Governor George Provopoulos. Even if Greece did manage to import limited amounts of food and other basics, they would be cripplingly expensive. Provopoulos warned as long ago as December that a return to the drachma would be «real hell», with Greeks forced to resort to barter during the transition period between the two currencies, «trading a kilo of olive oil for three kilos of flour». "NIGHTMARE SCENARIO" "There will be shortages in basic staples. Without fuel, the army and the police would not be able to move their vehicles. After a long period, things will return to a better balance. But during the first transitional phase we would be experiencing a nightmare scenario,» Provopoulos said. A former finance minister, Yiannos Papantoniou, saw trouble ahead nearly a year ago: «Greece would not be able to support 11 million people so there will be huge emigration flows,» he told Reuters Insider television last July. «Disruptions, social disruptions will come. I would say a regime of total anarchy." Last year 23,800 Greeks emigrated to Germany alone, 90 percent more than the previous year, German data show and Greeks are queuing up to learn German. Most economists agree the austerity measures Greece is laboring under offer it little hope of recovery near term, and some argue that if it leaves the euro, it could export its way back to health on the back of a vastly devalued currency. But, barring tourism, it does not have businesses or industries that could drive such a recovery. Even if freed of its debt-cutting targets, the fact the country runs a primary deficit - spending more than it takes in taxes - means it would have to continue austerity measures and, because it would be shut out of international markets, it would have no one to borrow from. "Even if you strip interest payments, with a primary current account deficit at about 10 billion euros, it would mean economic life would grind to a halt,» said Yannis Stournaras, head of Greek think tank IOBE. "Greece would have a hard time to import oil, foods, medicines and other primary inputs. Imagine the navy, police, without fuel. Natural gas spigots would close. GDP would be hurt by a battered banking system. Public debt would increase." Greece's recent history gives a taste of the political turmoil that could follow. After German occupation in World War Two, the country plunged into bitter civil war during the 1940s. Political turbulence in the 1960s was capped by a colonels' coup d'etat in 1967, with democratic elections not held until seven years later. Conditions are already hard for business people in Greece, with the country in its fifth year of recession. "The first shortages have begun to appear,» said Melina Ferousi, a businesswoman who imports paper and stationery items. «French and Spanish suppliers are still selling on credit but German ones are particularly strict and are refusing to do so." Some German suppliers have said they could not extend credit to Greece even if they wanted to because their insurers are refusing to cover the merchandise. Greek importers and exporters alike are finding it difficult to do business with foreigners, said Vassilis Korkidis, chairman of the retailers' union ESEE. "It's not that they're not trusting their individual Greek business partners anymore, it's the Greek banks they no longer trust,» Korkidis said. But business people do not see an exit from the euro as solving anything. Greece imports practically all its machinery, tools and software, so companies would be unable to grow. "If we return to the drachma, nobody will be able to do business abroad anymore,» said Iraklis Megas, who imports animal food. «I'll have to shut down my company the next day and so will thousands of others." How Greece would manage a transition from euro to drachma is unclear. A possible precedent is the split of Czechoslovakia into two countries with their own currencies in 1993. All cross-border money transfers between them were halted and border controls were tightened. Stamps printed secretly in Britain were glued on 150 million banknotes, which were trucked around the country with the help of police and the army. "DRACHMAGEDDON" Greece would have to try something similar, with some suggesting euro notes might be stamped with a D for drachma, but there are doubts whether it could introduce a new currency in a short period of time. "In my assessment, Greece does not have the strength of institutions to pull that one off in an orderly way. Instead, it's likely to be a slippery slope, which - through chaos and ruin - may then end the same way months or years down the road,» said Erik Nielsen, global chief economist at Unicredit. In the end, since the International Monetary Fund, the European Central Bank and euro zone governments are now left holding most of Greece's 250 billion euro debt mountain, they may decide it is best to try and keep things going rather than drop the curtain on Greece's euro dream and face heavy losses themselves. That is the calculation being made by the SYRIZA party, which had until recently been surging ahead in opinion polls with its radical anti-austerity platform that European leaders say will lead to certain bankruptcy and an exit from the euro. But a poll on Thursday showed a return in support for the establishment parties that negotiated the bailout, a sign the nightmare scenario of life outside the euro may be sinking in. Some have even been able to see the funny side. «Drachmageddon», on Radio Arvyla TV in November, told how the drachma, kicked into outer space in 2001, crashed back to earth as a meteor and destroyed everything. "The main reason we expect Greece to stay in the union is that as bad as things are now, it will be worse out,» said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "It seems far too simple to think that a devaluation is all Greece needs.» [Reuters]

A presidential decree announcing the dissolution of Parliament and a new round of general elections was erected on Saturday. According to the decree, elections will take place on Sunday, June 17, while the convocation of the new Parliament is scheduled for Thursday, June 28, at 11 a.m. The decree was co-signed by Greek President Karolos Papoulias and caretaker Prime Minister Panayiotis Pikrammenos.

One crew member was killed while another three were missing on Saturday morning, after a ship carrying an oil-stone capsized in the sea area between the island of Zakynhos and the Port of Killini early on Saturday. Among those missing were the ship’s captain and first mate.

As speculation about Greece’s future in the eurozone reached fever pitch, German Chancellor Angela Merkel on Friday reportedly suggested to President Karolos Papoulias the possibility of a referendum being held, in parallel with general elections scheduled for June 17, to assess the extent to which Greeks want to remain in the single currency bloc. Merkel “conveyed some thoughts” about a possible referendum during a telephone conversation with Papoulias in which she emphasized Europe’s determination to help Greece emerge from the crisis, the new government spokesman Dimitris Tsiodras said in a statement. The statement added however that holding such a referendum does not fall within the powers of the country’s caretaker government. The news of the German chancellor’s purported overture -- which a spokesman for Merkel refuted -- clearly rankled Greek party leaders. The leader of the Coalition of the Radical Left (SYRIZA), Alexis Tsipras, accused Merkel of treating Greece like a “protectorate.”Conservative New Democracy chief Antonis Samaras, for his part, said, “The Greek people do not need a referendum to prove their choice to stay in the eurozone.” Socialist PASOK stated that “referendums fall exclusively within the competencies of the government and the Greek Parliament and not the EU or other member states.” Former PASOK leader and ex-Premier George Papandreou had proposed just such a referendum in October, provoking the anger of Merkel and other EU leaders and, soon after, the collapse of his Socialist government. In her conversation with Papoulias, Merkel said the Union was willing to boost policies to revive growth and reduce unemployment across the bloc. She also reportedly urged the president to do everything possible to ensure the emergence of a stable Greek government as soon as possible. The furore over Merkel’s supposed intervention came as speculation about Greece’s future in the eurozone peaked. A senior European official indicated that the European Commission and European Central Bank are working on fallback scenarios for a possible Greek euro exit while the country’s debt problems were said to be topping the agenda of talks at the annual G8 summit of the world’s most powerful leaders. The assertion by EU Trade Commissioner Karel De Gucht appeared to be the first time an EU official has acknowledged the existence of contingency plans for a possible Greek withdrawal from the euro. “A year and a half ago there maybe was a risk of a domino effect,” De Gucht told Belgian newspaper De Standaard, referring to the threat of Greece leaving the euro. “But today there are in the European Central Bank, as well as in the Commission, services working on emergency scenarios if Greece shouldn’t make it,” he said, adding that “a Greek exit does not mean the end of the euro, as some claim.” The comments by De Gucht were quickly shot down by the EC and ECB. European Economic and Monetary Affairs Commissioner Olli Rehn stated that a Greek exit “is not a scenario we are preparing for.” “We are working to keep Greece inside the euro area,” he said. An ECB official said the central bank “would not join an opportunistic debate regarding scenarios of Greece exiting the euro.” German Finance Minister Wolfgang Schaeuble stopped short of refuting these scenarios. “Our citizens expect us to be prepared for everything,” Schaeuble said, adding that although he remained in favor of Greece staying in the euro, it would have to honor its commitments to creditors in order to do so. European Parliament President Martin Schulz, during a visit to Athens, was more diplomatic, stressing the importance of growth-oriented measures but also the need for Greece to honor its commitments to foreign creditors.

Turkey issued a warning on Friday that if companies seeking a license to drill for oil deposits off Cyprus do not withdraw their bids, they “will not be included in energy projects in Turkey in the future,” according to reports. “We call on the countries concerned and the oil companies to act with common sense, not to engage in activities in maritime fields that are under dispute... and to withdraw from the bidding,” the statement from the Turkish Foreign Ministry said, adding, “Turkey will not allow any activity in these fields.” Ten consortia and five companies from 15 countries have submitted bids to drill for gas and oil off the coast of the divided island. According to Ankara, some of the 12 fields in question “conflict” with Turkey’s continental shelf, while others overlap areas that Turkey and the Turkish-occupied north of Cyprus plan to explore.

After gracing New York City’s iconic Times Square with a giant billboard depicting images of classic Greek scenes -- the Acropolis, a cafe table with two wooden chairs -- in March and April, the Up Greek Tourism campaign has unveiled another -- this one featuring the classic blue dome of an island church with the sea in the background -- in central Washington DC. The campaign comes at what is proving to be a difficult time for the country’s vital tourism sector, with the Hellenic Association of Travel and Tourism Agents (HATTA) on Friday sending a letter to the leaders of Greece’s main political parties warning of the negative effects that the prevailing political uncertainty is having on the industry. They asked that the political leadership make assurances to Greece’s partners that it is a stable and safe country in which to travel, arguing that “international tourism agents are freezing their bookings and withdrawing their associates from the country.” Up Greek Tourism is an initiative started in 2009 by a group of Greek Americans in New York, spearheaded by Yorgos Kleivokiotis, Onic Palandjian and Stathis Haikalis, in response to the Greek crisis and the tarnishing of the country’s image in the international media. The group has grown since 2009 to include marketing, management and promotion experts who raise funds and design campaigns promoting the Greek destination. “We are talking with Boston, Atlanta and Chicago,” said Jim Stoucker, a campaign member. “We hope to be able to expand to these cities soon and to help Greece, and especially the 20 percent of its citizens who work in the tourism industry.” According to Art Dimopoulos, who coordinated the Washington initiative, the campaign has the support of the American Hellenic Educational Progressive Association (AHEPA) and the American Hellenic Institute (AHI). “Our aim to increase tourism in Greece,” Dimopoulos said. AHI President Nick Larigakis noted that “15 percent of Greek GDP comes from tourism. Given the situation, it is imperative that the country’s revenues from tourism increase.”

The Finance Ministry is urgently looking into alternative scenarios of how to maintain its weak cash reserves if the revenue inflows outlook deteriorates. The only apparently safe option is to cut or suspend certain expenses. The total in June is projected at 5 billion euros, of which 4 billion is expected to flow in from the International Monetary Fund and the European Financial Stability Facility (EFSF). The representatives of the country’s creditors -- collectively known as the troika -- may have put off their visit until after the formation of a Greek government but technical cooperation with the General Accounts Office (GAO) and monitoring of the budget is continuing on a daily basis. Sources report that besides political developments, the troika is “particularly concerned” at the recession of the Greek economy and developments in the budget. The public coffers are seen running dry at the end of June, but this will depend on two key factors. First, revenue collection: In the first 10 days of May, inflows were about 15 percent lower than projected but there are fears that the slide may reach 50 percent. The GAO will have a picture for the first 20 days on May 23, while the last three days of the month are considered crucial, when 1.5 billion euros of the month’s budgeted total of 3.6 billion are expected to flow in. Second, whether the IMF and EFSF installments are disbursed: This is not certain, as the decision will be purely political for both providers and evidently partly linked to political developments. Earlier this month the eurozone approved a disbursement 1 billion short of the 5 billion euros that were expected. If revenue collection keeps faltering and the IMF and EFSF loans do not arrive, the first option the ministry is considering is cuts in income tax rebates and credits to social security funds. It may also trim grants to various state agencies and payments to public sector suppliers. This particular tactic was employed last September and enabled the government to retain cash until mid-December. Another option considered is to continue to issue treasury bills. Of the budgeted 5 billion in expenses, 3.6 billion euros comprise the refinancing of T-bills and interest payments. There is also the option of not paying Greece’s contribution to the EFSF, which amounts to 900 million in June. The eurozone may approve its postponement to July or August. Finally, the government may use part of the resources of the Financial Stability Fund (FSF), which are mainly earmarked for the recapitalization of banks. The fund currently has a reserve of 3 billion euros. According to statements by FSF members, the fund will disburse 18 billion on Tuesday or Wednesday to boost banks’ capital base. National Bank of Greece will receive 6.9 billion, Eurobank 4.2 billion, Alpha Bank 1.9 billion and Piraeus Bank 5 billion euros.

Just a day after the swearing-in of the 300 MPs elected to Greece’s Parliament in the May 6 elections, the House was dissolved on Friday to pave the way for fresh polls on June 17, with political parties already forming their strategies and seeking alliances. In the camp of conservative New Democracy, sources said officials were planning to ratchet up the rhetoric vis-a-vis the Coalition of the Radical Left (SYRIZA) by confronting voters with the “euro or drachma” dilemma, emphasizing that the leftist party’s insistence on rejecting Greece’s debt deal with its creditors was putting the country’s future in the eurozone at risk. Buoyed by the results of a new opinion poll showing ND to have inched ahead of the ascendant SYRIZA, the conservative party is expected to intensify its attack on the leftist group, insisting ND is the only party that can successfully renegotiate the debt deal with foreign creditors as party leader Antonis Samaras had been the first to propose an overhaul of the terms of the agreement. For his part, SYRIZA leader Alexis Tsipras accused ND and socialist PASOK -- the two parties that signed the debt deal -- of “scaremongering” with their threats of a possible Greek exit from the eurozone. In an interview with The Wall Street Journal, Tsipras said Greece and its creditors should make certain concessions to keep Greece in the euro. PASOK, which paid the steepest political price for its pro-bailout stance, is planning to appeal to Greeks who did not vote in the May 6 polls and to draw back traditional supporters. A new opinion poll, carried out by the firm Marc for Alpha TV, shows ND inching ahead of SYRIZA, with the conservatives garnering 23.1 percent, the leftist party 21 percent and PASOK 13.2 percent.

Fitch lowered its ratings of Greek banks Friday in the wake of its cut of the country's sovereign rating. Fitch put the new rating for the National Bank of Greece, Efg Eurobank Ergasias, Alpha Bank, Piraeus Bank and Agricultural Bank of Greece at CCC, down from B-minus, in the mid-level range for «speculative» or junk bonds. The move came a day after Fitch cut Greece's sovereign rating to CCC, or «vulnerable to default», over the increased risk that the country would be forced to leave the eurozone. "In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF program of fiscal austerity and structural reform, an exit of Greece from (the eurozone) would be probable, and/or this could be followed by a withdrawal of international support to Greek banks,» Fitch said. "A Greek exit would likely result in widespread default on private sector as well as sovereign euro-denominated obligations." [AFP]

Political uncertainty in Athens seems to be compounding the effects of European consumers’ economic worries on the Greek tourism industry. Besides the 50 percent drop in hotel bookings from abroad which followed the May 6 election, there are also worrying reports about agritourism bookings, as well as a small decline in demand for Greek cruises. According to Guest Inn, the country’s largest agritourism network, the drop in demand is considered moderate to serious compared to past years. Operators say the year began well but things deteriorated later and they are resting their hopes on last-minute bookings. The decline seems to be affecting all areas of the country, although Crete seems to have been largely spared. “The picture we have from our traditional markets is that all countries are going through a period of instability, independent of the Greek crisis, and the public is in a state of insecurity,” Guest Inn said in a statement.

Cyprus President Dimitris Christofias inaugurated the 37th Cyprus International Fair at Expo Cyprus in Nicosia on Friday, against the backdrop of economic woes that have contributed toward a drop in the number of exhibitors and the state reducing its own stands to just a handful. Scheduled to run through May 27, the exhibition caters to all kinds of commercial and consumer interests, promoting innovation and broadening consumer choice. A key part of this year’s exhibition is that dedicated to energy issues, as the recent hydrocarbon discoveries under the seabed south of Cyprus have generated major interest in the island’s economy from global players in the industry, and this is reflected in the stands and visitors.

Turkey issued a warning on Friday that if companies seeking a license to drill for oil deposits off Cyprus do not withdraw their bids, they “will not be included in energy projects in Turkey in the future,” according to reports. “We call on the countries concerned and the oil companies to act with common sense, not to engage in activities in maritime fields that are under dispute... and to withdraw from the bidding,” the statement from the Turkish Foreign Ministry said, adding, “Turkey will not allow any activity in these fields.” Ten consortia and five companies from 15 countries have submitted bids to drill for gas and oil off the coast of the divided island. According to Ankara, some of the 12 fields in question “conflict” with Turkey’s continental shelf, while others overlap areas that Turkey and the Turkish-occupied north of Cyprus plan to explore. Failure to desist, the statement said, “will cause tensions in the region.”

Greek stocks rebounded from Thursday’s 22-year lows on Friday, led by OTE telecom, Public Public Power Corporation (PPC) and big banks. The Athens Exchange (ATHEX) general index rose 2.54 percent to 550.13 points, from 536.49 on Thursday. The blue chip FTSE/ATHEX index gained 3.10 percent to 204.48 points. The banks index ended 4.88 percent higher, at 154.83 points. Former bellwether National Bank of Greece climbed 7.69 percent to 1.26 euros. Alpha Bank outperformed among blue chips, adding 10.12 percent to reach 0.76 euros. PPC, which together with OTE fell to all-time lows on Thursday, surged 7.14 percent to 1.65 euros. OTE was 9.46 percent higher, at 1.62 euros. Gaming firm OPAP shed 2.50 percent, approaching all-time lows at 4.92 euros. Turnover rose considerably to 59.6 million euros. Fifty-seven stocks headed north, 66 fell and 21 remained unchanged.

Hellenic Telecommunications Organization (OTE) SA’s bonds are falling more than those of any of the largest high-yield debt issuers as Greece lurches through a political and banking crisis that may see it exit the euro region. The 3.2-billion-euro ($4.1 billion) par value of notes that Greece’s largest phone company has in Bank of America Merrill Lynch’s Euro High-Yield index fell 22 percent on average this month. That’s a bigger drop than any of the 50 biggest issuers in the lender’s Global High Yield index, where Petroleos de Venezuela SA notes faced the biggest losses at 9.1 percent. “OTE’s performance has a lot to do with political turbulence and worries of the economic climate declining even further, which will affect domestic revenues for sure,” said George Satlas, the Athens-based head of investments at Postal Savings Bank, which owns OTE bonds. “Current political incompetence seems to drive the market now.” The market value of OTE bonds fell by $861 million to $2.6 billion this month, according to Bank of America Merrill Lynch data. That has driven the average yield of its debt to 40 percent from 18 percent. OTE’s 5 percent bonds due 2013 slumped 26.9 cents on the euro since the end of April to 61.8 cents, pushing the yield to 57 percent, Bloomberg Bond Trader prices show. The yield relative to benchmark German government debt widened to 56 percentage points from 17.5 percentage points. Credit default swaps protecting OTE’s debt more than doubled this month, surging to 3,709 basis points from 1,692 at the end of April, according to prices compiled by Bloomberg. The debt insurance contracts are the worst performers among European phone companies this month. “There is an obvious disconnect between the prices at which our bonds are currently trading and the company’s operational performance,” Kevin Copp, OTE’s chief financial officer in Athens, said in an e-mail. “In the first quarter, OTE group revenues showed their smallest decrease in the last two years and mobile revenues were actually up for the first time in several years, with cash flow generation remaining robust.” <+text_title>Negative outlook <+roman>Fitch Ratings put OTE’s BB rating on review for downgrade last month, citing the contraction in the Greek economy and the lack of a refinancing plan for maturing debt. Still, last year’s earnings were better than expected and its debt to earnings ratio of 2.54 is “comparable to low BBB-rated peers,” Fitch analyst Bulent Akgul said in an April 16 report. OTE is rated B at Standard & Poor’s and an equivalent B2 at Moody’s Investors Service, both five steps below investment grade and both with “negative” outlooks. The company has 3.2 billion euros of notes outstanding including the 1.2 billion euros of 5 percent bonds due 2013 issued a decade ago, Bloomberg data show. Net debt at the end of the first quarter was 3.4 billion euros, down from 4.3 billion euros a year earlier, the company said on May 10. The phone company has a 445-million-euro loan and a 312-million-euro revolving credit facility due in September, according to its website. It also has a fully drawn 900-million- euro revolving credit due 2013. Money in a revolving credit can be borrowed again once it’s repaid; in a term loan, it can’t. OTE is “well under way” in implementing a refinancing strategy, “which is aimed at both extending our maturity profile as well as reducing our overall net debt,” Copp said, without providing details. “Despite the strong market noise caused by politicians and scared traders with a high-grade mentality, OTE’s 2013 bonds represent an outstanding investment opportunity,” said Stan Manoukian, founder of Independent Credit Research in Agoura Hills, California. When OTE’s debt is refinanced the “notes will get back to the high 80s to low 90s.” OTE’s share price plunged more than 15 percent on May 16 after the company was deleted from the MSCI Greek Index. “Hellenic Telecom bonds are very liquid and represent a technical proxy of Greek sovereign debt,” Manoukian said. [Bloomberg]

An Iranian journalist who managed to escape from an apartment in central Athens where she was being held captive has testified that she and another five people were tortured for a period of five months by two compatriots. The unnamed 28-year-old alleged that she had asked the elder of the two suspects, aged 43, to help her flee Iran, where she claims that she was a victim of political persecution. The 43-year-old, with the help of his 24-year-old brother, managed to get the young woman, together with her husband and another family of four, into Turkey and then into Greece, in exchange for 16,000 euros. The 43-year-old, who is wanted by Interpol, allegedly kept the group hostage in an apartment in the Athens neighborhood of Kolonos due to fears that they would reveal his whereabouts to authorities. He also allegedly subjected them regularly to torture. The six captives managed to escape in February and made their way to the police station in Omonia Square. The two brothers have been arrested and face a string of charges as well as possible extradition to Iran.

Niko Ago, an Albanian national who has lived and worked in Greece for the past 20 years as a journalist in a number of local media, faces deportation after being notified on Friday that he had not worked enough hours in 2007-08 to qualify for a residence permit. Ago, who has two teenage daughters, was given 30 days to leave the country voluntarily or face deportation.

Four men were arrested in Attica on charges of alleged tax evasion, police announced on Friday. The 57-year-old general manager of oil refinery was arrested in Aghia Paraskevi for owing up to 1.1 million euros, while the 36-year-old manager of an aluminum company was taken into custody for the sum of 254,000 euros in the northern suburb of Nea Erythraia. The other two men arrested allegedly owe the state 220,000 and 135,000 euros.

Four masked robbers carrying Kalashnikov assault rifles burst into a jewelry store in the western suburb of Ilion on Friday. The assailants overpowered the store owner before fleeing the scene with cash and jewelry in a stolen car.

European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said policymakers have a “strong preference” for Greece to stay in the euro area. “It is a constitutional matter,” Gonzalez-Paramo told reporters in London on Friday. “There is no exit foreseen in the treaty.” He declined to comment on remarks made by European Union Trade Commissioner Karel De Gucht that officials from the ECB and the European Commission are working on contingency plans to deal with a possible Greek exit from the euro. [Bloomberg]

On almost any flight to Nicosia from Athens or Thessaloniki these days, there is bound to be one person with too much baggage and a nervous smile, hoping to make a fresh start in Cyprus. Most will succeed as hundreds of Greeks before them who have found jobs in tourism, catering, financial services and education, as well as in one of the 1,500 Greek businesses that have relocated to the Eastern Mediterranean island in the last 20 months. The wave of Greek emigres to Cyprus began in earnest in 2010 and has continued unabated to date. According to figures from the Cypriot social security agency, in April 2011, of the total 31,000 Greeks registered as residents on the island, 10,000 were registered with the social security fund and 2,000 were receiving unemployment benefits from the Cypriot state. At the same time, 1,043 Greeks were employed by the Cypriot civil service and 471 were serving in the education sector. Greek economic migrants were initially welcomed very warmly by the Cypriots. According to one employer, who declined to be named, “they had significant work experience and qualifications. Tourism enterprises were saved as they found employees with experience and who spoke excellent English as well as Greek.” With the passage of time, however, and Cyprus’s unemployment index climbing from 3 to 10 percent, the mood shifted, especially in the education sector, where the number of Greek applicants shot up to 9,000. Experts concede that the crisis Cyprus is currently experiencing cannot be compared to Greece’s, though they say that the situation is similar to Greece in 2008 as state spending is being cut and the construction sector is suffering a slowdown. The common language and shared cultural roots, the short distance from home and low crime rates have all contributed to making Cyprus especially attractive for Greeks looking for alternatives. “I am very pleased at the prospect of raising my children here,” 41-year-old sociologist Gerasimos Haritopoulos, who arrived in Cyprus in late April, told Kathimerini. “I was called in for an interview for the job in the first ad I responded to,” he said. Haritopoulos now works as the director of an institution for people with mental disabilities. “I am hoping that I will soon be joined by my wife and our two children -- aged 1 and 3. The motivation to emigrate is not just financial, but also the quality of life and the prospects I can offer my children.” Slaviana, a 25-year-old photographer and mother of a toddler, is packing her bags for Cyprus for much the same reason. “I have relatives in Cyprus who will help me and my husband,” she said. “I have been looking for a job here [in Greece] since September and have found nothing satisfactory. I am very worried about the spread of the crisis and I think I would feel much safer if I moved from Europe altogether.” Costas Karathanasis, aged 30, has been working at the University of Cyprus since late August. Having completed his doctorate at the National Technical University of Athens in biomedical technology and served his mandatory term in the military, he had concluded that academic life suited him well. In Greece, however, that was an avenue that was closed to him. “I started putting together the paperwork needed to move to Switzerland when some friends told me that they were looking for people with my qualifications in Cyprus,” Karathanasis said. Ten days later he moved to Nicosia on a fellowship. “The bureaucratic process went by very fast and most of the paperwork was taken care of by the university’s administration,” said Karathanasis. Today, just a few weeks before the end of his first academic year there, he is very pleased with his decision last summer. “The working conditions here are excellent and the mentality is close to our own, while I’ve forgotten what crime is,” he said. “In fact, many friends back in Greece keep asking me whether I’ve heard of any job openings.”