Tens of thousands of angry Greek protesters filled the streets of Athens on Tuesday to greet German Chancellor Angela Merkel, who offered sympathy but no promise of further aid on her first visit since the euro crisis erupted three years ago.

As police fired tear gas and stun grenades to halt angry crowds chanting anti-austerity slogans and waving swastika flags, Merkel's host, Prime Minister Antonis Samaras, welcomed her as a "friend."

Blamed by many Greeks for imposing draconian budget cuts in exchange for aid, Merkel reaffirmed Berlin's commitment to keep the debt-crippled Greek state inside Europe's single currency.

"I have come here today in full knowledge that the period Greece is living through right now is an extremely difficult one for the Greeks and many people are suffering," Merkel said during a joint news conference with Samaras just a few hundred yards from the mayhem on Syntagma Square, outside parliament.

"Precisely for that reason I want to say that much of the path is already behind us," she added, offering a public display of support to Samaras's three-month-old government on her first visit to Greece since 2007.

Reuters

Police try to disperse protesters reacting to the visit of Germany's Chancellor Angela Merkel in Athens on Oct. 9.

She tried to reassure her hosts that their reforms would eventually pay off, but also made clear that Greece, which has seen its unemployment rate surge to nearly 25 percent and economic output shrink by a fifth, would not solve its problems overnight.

Angela Merkel greeted warmly by prime minister, but not by Greeks

Samaras promised to implement economic reforms necessary to restore confidence: "The Greek people are bleeding but are determined to stay in the euro," he said.

"All of those who made bets that Greece would fail... will lose," Samaras added, according to Spiegel.

On the other side of the parliament building, tens of thousands of demonstrators defied a ban and gathered to voice their displeasure with the German leader, whom many blame for forcing painful cuts on Greece in exchange for two European Union/International Monetary Fund bailout packages worth more than 200 billion euros ($260 billion).

Greek police fired teargas and stun grenades when protesters tried to break through a barrier to reach the cordoned-off area where Merkel and Samaras were meeting. Some demonstrators pelted police with rocks, bottles, paint bombs and sticks.

Four people dressed in World War II-era German military uniforms and riding on a small jeep, waved black-white-and-red swastika flags and stuck their hands out in the Hitler salute. Some protesters carrying banners bearing slogans such as, "No to the Fourth Reich," the BBC reported.  

Other banners read "Merkel out, Greece is not your colony" and "This is not a European Union, it's slavery."

Reuters

Police try to disperse protesters reacting to the visit of Germany's Chancellor Angela Merkel in Athens on Oct. 9.

Some 6,000 police officers were deployed, including anti-terrorist units and rooftop snipers, to provide security during the six-hour visit. German sites in the Greek capital, including the embassy and the Goethe Institute, were under special protection. This security operation was one of Athens' biggest in a decade, the BBC reported.

Among the peaceful protesters, teacher Christina Vassilopoulou, 37, told AFP that despite having a doctorate, she only makes 900 euros (about $1,160) a month.

"We have children that go hungry and most of the parents are unemployed," she told the AFP news agency, the BBC said.

Constantine Spiliagopoulos, a lawyer who was also taking part in the protests said Merkel was "one of the main reasons that Greece's low income and the working classes of Greece are under attack," according to the BBC.

"That is why we must make our presence felt, we must shout against these polices and show that we will do everything so that they do not continue," she added.

Constantinos Siathas was more hopeful, telling The Associated Press: "I think most people, at least those who think and don't act based on feelings or utopian ideas, are pleased and are expecting a lot from Mrs. Merkel's visit."

Yiannis Bournos, a spokesperson for the leftist Syriza party, criticized Merkel's visit, telling the BBC that Greeks were "frustrated and enraged because they clearly understand that Mrs. Merkel's visit is just a theater play for the political support of a collapsing coalition."

Aid money "urgently needed"
After steering clear of Greece for the past five years, Merkel decided to visit now for several reasons.

She was keen to show support for Samaras, a fellow conservative, as he struggles to impose more cuts on a society fraying at the edges after five years of recession.

Yannis Behrakis / Reuters

Demonstrators, dressed as Nazis, wave a swastika flag as they ride in an open-top car in Syntagma Square in Athens to protest against the visit of Germany's Chancellor Angela Merkel, Oct. 9, 2012.

With a year to go until Germany holds a parliamentary election, Merkel also hoped to neutralize opposition criticism at home that she has neglected Greece and contributed to its woes by insisting on crushing budget cuts.

After her government flirted earlier this year with the idea of allowing Greece to exit the eurozone, she now appears determined to keep it in, at least until the German election is out of the way.

IMF: Global economic slowdown is getting worse, US must avoid 'fiscal cliff'

Greece is in talks with its "troika" of lenders - the European Union, European Central Bank and International Monetary Fund - on the next tranche of a 130 billion euro ($170 billion) loan package, its second bailout since 2010.

Without the 31.5 billion euro tranche, Greece says it will run out of money by the end of November.

The European commissioner for economic and monetary affairs, Olli Rehn, said Tuesday that Greece's creditors would not allow the country to go bankrupt, according to the German publication Spiegel. As European Union finance ministers met on Tuesday, Rehn said the next aid package would be granted "at the latest by November."

Merkel said the aid payment was "urgently needed" but stopped short of promising that the funds would flow.

"The troika report will come when it is ready. Being thorough is more important than being quick," Merkel said.

"We are working hard on this, but we must resolve all the problems," she added. "I think we'll see light at the end of the tunnel."

"This is an effort that should be seen through, because otherwise it would make the circumstances even more dramatic later on," she added, according to Spiegel.

Ties between Germany and Greece run deep. Thousands of Greeks came to Germany after World War II as "guest workers" to help rebuild the shattered country and more than 300,000 Greeks currently reside there.

But the relationship is clouded by atrocities Greeks suffered at the hands of the Nazis. Samaras' own great grandmother killed herself after she watched Nazi tanks rolling down the streets of Athens and the swastika flying over the Acropolis.

Greek President Karolos Papoulias, whom Merkel also met on Tuesday, fought against the Germans as a teenager, before fleeing to escape persecution by the Greek military dictatorship and finding refuge in Germany.

The crisis has revived long-dormant animosities, with Greek protesters burning effigies of Merkel in Nazi gear and German media playing up images of lazy Greeks keen for German cash.

Relations hit a post-war low early this year when Merkel's finance minister, Wolfgang Schaeuble, likened Athens to a "bottomless pit" and proposed imposing a European "Sparkommissar" on Greece to control its finances.

"The average German voter is irritated at the thought of dispatching more taxes or savings to feckless southerners, yet is desperate for the respect and goodwill to Germany that comes from public displays of magnanimity," said David Marsh, chairman of think tank OMFIF.

"When Merkel flies to Athens, she's showing she's in charge, and she cares."

Reuters contributed to this report.

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ATHENS – Shock was a common sentiment in the heart of Athens this week. 

Athinas Street, the colorful shopping mile in the Greek capital, is known for its lively fish and meat markets, where spice salesmen mix with traditional shoemakers and sidewalks are packed with commodities for sale. 

But at one corner earlier this week shoppers and residents stopped to look at the ugly face of growing public anger in the Greek crisis.

Workers were removing broken glass, burnt wood and other rubble from the Bank of Cyprus building, one of at least 48 Athens buildings that were torched by protesters during riots two days earlier.

Two blocks up the road, 50-year-old Michael Ipermahos stood outside his small clothing store and looked on in despair.

"Once, we were proud to be Greeks. Now, I am ashamed. Ashamed not of myself, but of the Greek politicians and what they have done to this country," he said.

'Work, work, work'
Ipermahos said he has been to several of the public demonstrations outside of the Greek parliament in the past months to peacefully protest the harsh austerity measures and to voice his anger over what he calls "injustice.“

"I work, work, work, day and night, 16 hours every day, sometimes in temperatures below freezing, sometimes in brutal heat," said Ipermahos, a father of two children – ages 20 and 23 – who still live at home with him and his wife.

"We are not lazy," he said. "But while my income is shrinking, the taxes are going up, fuel prices are skyrocketing and even basic food is becoming more expensive."

On this cool morning, only a few people stopped to look at the tee-shirts, jackets and other garments that Ipermahos sells.

But he does have one item that sells briskly.

"Gas masks," Ipermahos said, as he pointed to the prominently displayed protection gear.

"Because tear gas is regularly used at the protests, we now also offer gas masks. It is one of our best selling products," he said.

But it may not be enough, over the course of the past two and a half years, Ipermahos said the little shop that he owns with his brother-in-law has seen a 60 percent decline in business.

Courtesy Chris Manolitsis

Chris Manolitsis, a 52-year-old freelance sound engineer, is feeling the crunch of the Greek economic crisis.

And, hope for a better future is fading.                                                             

"It is almost certain that we will lose our jobs; we are only counting the days,“ he said. 

Armed robbers steal 70 relics from museum in Olympia, Greece

Tightening the belt
Of course, it’s not just retail businesses that are feeling the crunch in Greece.

Chris Manolitsis, a 52-year-old freelance sound engineer who has been working with Greek artists for over 30 years, said he had been struggling ever since the 2008 collapse of Lehman Brothers in New York.

"The Greek music industry has generally deteriorated because people do not have the money to go out to nightclubs or events anymore, one of the first things everybody saves on is entertainment," he explained.

In recent years, the father of two grown-up children had to cope with a 50 to 60 percent reduction in his income, though he still feels somewhat financially independent because he has been receiving money from other sources, including rent from a house that he bought in better economic times.

However, his alternative income sources are far from secure.

"The woman who is renting my house is a civil servant who had her salary already cut three times and she is now facing a fourth cut," Manolitsis said. "I agreed to reduce her rent by 20 percent, otherwise the mother of a young child would have moved out and I would have been left with more uncertainty.“

And his 27-year-old son Terry, who finished college with a degree in media and communications, was recently fired from a job as a security guard, the only employment he could find after finishing his studies. As a result, the young man left for Scotland, looking for job opportunities outside Greece.

In Greece, the crisis is making people ill (literally)

Broken promises
Manolitsis blames the current financial crisis on two decades of financial mismanagement, which has resulted in broad public anger and deeply rooted mistrust towards politicians.

"Greeks had the wool pulled over their eyes, so to speak,"  he said.

"When former Prime Minister Papandreou won the elections in 2009, for example, he received overwhelming support on a platform that there is plenty of money," he said. "Two days later, the politicians said sorry, we made a mistake, there is no money.“

Today, most Greeks feel that they have been pushed to the limits, leading to growing despair and rising suicide rates.

"The situation is a tragedy and a shame for a nation with such a powerful heritage," Manolitsis said. "Of course I am worried about my future, but we have to keep going and I am not afraid to get my hands dirty or explore new routes."

Next week, the Greek sound engineer has signed up for a training seminar, which will teach him how to sell insurance.

Reporter's Notebook  
 
ATHENS – When you touch down in Athens, the signs of an economic slump are immediately evident. The arrivals hall in the domestic terminal is almost deserted, with flights within Greece having been cut back by about 25 percent. Outside the taxi pick-up point stretches a long line of yellow cabs going nowhere. It is symbolic of Greece's economy – stretched and stuck.

On the ride into town the driver explains that he's been waiting for me for seven hours. I was his second and last fare of the day.

Greece still holds the magic of an ancient Mediterranean country. The Acropolis, its columns lit majestically at night, juts grandly above Athens. It is a testament to one of the world's great civilizations.

But down here on the street, there is fear that Greece is unraveling as a modern state.

‘Economic death spiral’
You don't expect to see so many hungry people in a major European city. They line up each day looking for a handout in the soup kitchens and bread lines run by the municipality. But the 40 workers under contract to prepare a basic lunch of pasta and bread say they will lose their jobs in June because the city has run out of money to pay them.

A shoe shine man sits in front of a closed shop in central Athens Wednesday.

Essentially, the country is broke. And to borrow enough money to stay solvent, the Greek government has agreed to severe austerity measures imposed by the European Union, European Central Bank and the International Monetary Fund. The money will run out next month unless another chunk of the bailout is handed over. But the European Union wants even more cuts in government job, salaries and benefits.

Public employees have already taken a 40 percent pay cut and pensions are being reduced. The private sector has also been hit and unemployment is nearing 20 percent. A staggering 40 percent of youths between the ages of 18 and 24 are without jobs.

Take, for instance, Leo, a 64-year-old painter of religious icons for devout Greeks and tourists. His business dried up. The money ran out and he ended up living on the street. Evicted for not paying rent, Leo, who didn’t give his last name, took warm clothes, books and ten boiled eggs to his new home – a metal bench near a park in central Athens. He spent 45 days in the open with what he called the “unhappy homeless.” 

What makes Leo unhappy is the realization that the government is to blame. "They borrowed," he said. "Every time they needed money they borrowed and then borrowed some more."

Successive Greek governments borrowed an estimated $498 billion, in essence to bribe the Greek people into being happy. Governments who could offer cushy office jobs, fat pensions and long vacations got re-elected. It made perfect political sense, but it was economic suicide.

A businessman in the aviation industry described the country, "as gripped in an economic death spiral."

Enough to make you sick
Yiannis Varoufakis, a professor of economics at Athens University was just as blunt when he told me, “This is Greece's Great Depression. If you look at the statistics it is indeed a deeper slump than what Greece went through in the 1930s.”

John Kolesidis / Reuters

A man reads a newspaper in an empty souvenir shop in the Monastiraki tourist area in Athens on Wednesday.

Imagine for a moment taking a 40 percent pay cut. Then suffer an increase in sales tax to 23 percent. Add on increased rates for electricity, a new tax on heating oil and the cost of a gallon of gas hitting almost $10. Oh and your pension is not secure, and your kids stay home because there aren't enough teachers. It is enough to make you sick.
 
And that's precisely what the Greeks are doing. Getting ill. Hospital admissions are up 25 percent. At the same time hospital budgets have been cut 40 percent so there are shortages of medicine and staff.

Nikitas Kanekis is the director of Doctors of the World, a charity that runs health clinics. He has the genteel manner necessary to be a pediatric dentist, but the economic decline has unsettled him. "We have seen four times the number of Greek patients over the last year,” he said. “We are afraid the humanitarian crisis can develop into a humanitarian catastrophe."

It may already be happening. The department of health reports that suicides are up 40 percent. And violent crimes including murder are up almost 100 percent.  “We have all the characteristics we see in big cities in the Third World,” said  Kanekis. “People with no shelter, starving people and people looking for doctors and medicine."

Fears about what may come next
Greek coalition leaders are meeting Wednesday to prepare their response to a draft deal on steep cutbacks demanded by creditors in return for a $170 billion bailout that could protect the country from looming bankruptcy.

They need the money to stave off crunch time on March 20 when a big bond redemption payment is due. Without the bailout, they risk a default that could send shockwaves throughout financial markets and the global economy.

No one is certain it will happen. To receive the previous handout, Greece promised to cut 30,000 public-sector workers, but only 1,000 have been let go. The government also promised to sell off 65 billion euros in state owned assets. So far only 2 billion have been sold.

The government is trying to raise money through increased taxation. There's a new property tax that is collected through the state-owned electric company. If you don't pay the tax your electricity is cut off. There's a luxury tax to hit the wealthy – a 30 percent tax on sports cars and yachts. There's even a tax on private swimming pools. The government is reportedly using Google earth to pinpoint pools even as some Greeks are said to be using camouflage nets to hide them.

Even the Greek Orthodox Archbishop Hieronymos II of Athens and All Greece, who rarely comments on issues not related to the church, is worried.  “The unprecedented tolerance of the Greek people is being exhausted, rage pushes fear aside and the danger of social upheaval cannot be ignored anymore,” he warned in a letter sent to interim Greek prime minister.   

The origin of the words tragedy and economy are Greek. In this crisis, they are too close to home.