George Efstratiadis’s story shows why Greece will struggle to pull itself out of the mire, regardless of who is elected on Sunday.
George is 38, a father of three, and a gentle bear of a man; thoughtful, compassionate and religious. His grandfather arrived in the south-western port city of Patras with his family from western Turkey many years ago, in 1922, and made a living hawking sewing needles and cloth round the surrounding villages on foot, and selling their eggs and olive oil back in town.
His son – George’s father – worked as an electrician in the many factories that were then active in Patras, making rubber, textiles and food products. In 1968, he set himself up on his own account in a small maintenance company that grew steadily, and that George and his brother and sister would take over in 2000.
These days Idator specialises in water pumps of all kinds: for environmental projects, irrigation schemes, waste water and desalination plants, but also for swimming pools, shops and homes – filters, circulators, booster pumps. It is the sole Greek distributor for the leading US pump brand Xylem, formerly part of the big engineering group ITT.
Water is, obviously, a precious commodity in Greece, and George is a good businessman. The company thrived. Selling to plumbers, contractors, municipalities and water and power utilities, by 2009 Idator could boast a turnover of €8.8m – four times what it had been a decade earlier – and had 67 employees.
By last year, sales had plummeted to just €4.3m and the payroll had shrunk to 28. This year, if he is lucky, George expects to turn over €2.5m: back where he started.
“The transition from times of plenty to times of hardship has been very fast,” he says. “Every three months, I make a bunch of tough decisions, and every three months it is never enough.”
The first sign of what was to come was when the ministry in Athens inexplicably failed to put 400 planned waste-water projects out to tender. “They just weren’t being announced,” George says. Then private contractors began taking their time paying their invoices: “I’ve basically written off maybe half a million [euros] of unpaid bills.” The company’s public sector customers, the ministries and municipalities, stopped paying altogether.
“I started with the advertising,” George says. “Cut that back to zero. I slashed the travel budget. I rolled over our loans, to halve our repayments. I shrunk our corporate footprint, radically reduced the space we occupied, renegotiated the rents. I just cut all the company’s costs to the bone, the absolute bare minumum possible.”
The biggest cost of all, though, is wages. George had to start letting people go, at a rate of maybe two or three a month. “It has been the worst experience of my life,” he says. “We are a family firm; we are extremely sensitive about these things. We have always tried to bring people on, nurture careers. In all our history, we had never before fired a single person.”
So throughout last year, “every time I went up to speak to a colleague, they looked at me with fear in their eyes. I have cried tears with my employees, I have hugged them, and they have hugged me back. Some, a very few, got angry. Almost all understood this was not my choice; we could just no longer afford their salaries. But behind each of these people is a family.”
This year, rather than fire more people, George has cut some of their working days to six or even four hours, with a proportionate reduction in wages. It has, he says, been a devastating experience. But without the cuts he implemented, Idator, which he has worked for – sweeping the shop floor, running errands, filing – on and off since he was six years old, would have been in the hands of the receivers by the early summer of 2011.
George is not optimistic for the future. “I don’t think there is any politician alive who can really solve Greece’s problems at this moment,” he says. “We are fighters, we will pull through, but it will be very hard. Attitudes to easy money have to change, yes, and that will take an earthquake. But we cannot keep squeezing the people, increasing taxes, piling on the pressure. Maybe it is better to try to solve the problem now, for good.”
George has made contingency plans for his company that will, he hopes, allow it to face up to a scenario he believes very possible: a formal Greek default (“In a sense,” he says, “they’ve already defaulted. When the government can’t pay for my pumps, they’ve defaulted.”); a few months using the dollar, then a return to the drachma.
“I’m ready to confront that,” he says. “I’ve planned for it. When you have a company, and a family, you have to. The worst thing of all, the most dangerous thing, is panic.”
He doesn’t think the government has made any similar plans.
• Jon Henley is in Greece telling real people’s stories. Please contact him if you have suggestions for people he could see or places he could go, or send him your personal story (not too long, please …) He will post as much as he can on the blog. Jon can be contacted on Twitter (@jonhenley) where the hashtag for this series is #EuroDebtTales, or by email (email@example.com)