“As drugs go, it is the worst. It burns your insides, it makes you aggressive and ensures that you go totally mad,” said Maria, a former heroin addict. “But it is cheap and it is easy to get, and it is what everyone is doing.”

The drug crisis, brought to light in a new film by Vice.com, has put Athens’s health authorities, already overwhelmed by draconian cuts, under further strain.

The drug of preference for thousands of homeless Greeks forced on to the streets by poverty and despair, shisha is described by both addicts and officials as a variant of crystal meth whose potential to send users into a state of mindless violence is underpinned by the substances with which the synthetic drug is frequently mixed: battery acid, engine oil and even shampoo.

Worse still, it is not only readily available, but easy to make — tailor-made for a society that despite official prognostications of optimism, and fiscal progress, on the ground, at least, sees little light at the end of the tunnel.

“It is a killer but it also makes you want to kill,” Konstantinos, a drug addict, told. “You can kill without understanding that you have done it… And it is spreading faster than death. A lot of users have died.”

For Charalampos Poulopoulos, the head of Kethea, Greece’s pre-eminent anti-drug centre, shisha symbolises the depredations of a crisis that has spawned record levels of destitution and unemployment.

It is, he said, an “austerity drug” — the best response yet of dealers who have become ever more adept at producing synthetic drugs designed for those who can no longer afford more expensive highs from such drugs as heroin and cocaine.

“The crisis has given dealers the possibility to promote a new, cheap drug, a cocaine for the poor,” said Poulopoulos at a centre run for addicts in Exarcheia, the anarchist stronghold in Athens.

“Shisha can be sniffed or injected and it can be made in home laboratories? You don’t need any specialised knowledge. It is extremely dangerous.”

Across Greece, the by-products of six straight years of recession have been brutal and cruel. Depression, along with drug and alcohol abuse, has risen dramatically. Delinquency and crime have soared as Greece’s social fabric has unravelled under the weight of austerity measures that have cut the income of ordinary Greeks by 40 per cent.

Greece’s conservative-dominated coalition has tried to deal with the problem by driving drug users and other homeless people out of the city centre — a series of controversial police operations has swept central streets, clearing crowded doorways and malls.

“But with such actions, authorities are only sweeping the problem under the carpet,” said Poulopoulos, a UK-trained social worker.

“What, in reality, they are really doing is marginalising these people even more by pushing them into the arms of drug dealers who offer them protection.”

By arrangement with the Guardian

But soaring taxes and maintenance costs — largely as a result of the Greek economic crisis — have prompted Athina Onassis, heir to the oil tanker and business empire built by her grandfather and the sole surviving inheritor of one of the world’s biggest shipping fortunes, to sell the family’s private island, Skorpios, to the daughter of a Russian oligarch.

Ekaterina Rybolovleva, whose father has substantial shares in the Bank of Cyprus, has picked up the idyllic isle for EUR117 million and in effect cut the last remaining ties of the House of Onassis with Greece.

“This is the end of an era, the end of the Onassis myth as Greeks have known it,” said Alexis Mantheakis, author of Athina Onassis: In the Eye of the Storm. “Skorpios was the iconic symbol of the Onassis legend and family.”

Purchased by the late magnate in 1962 for 3.5m drachmas — the equivalent of $10,000 — the Ionian isle was where Onassis entertained his opera singer lover Maria Callas. It was also where he married Jackie Kennedy in 1968 and the location of lavish parties that helped give birth to the concept of celebrity.

Establishing the rich man’s trend of owning island paradises, the tycoon shipped hundreds of plants and trees to the isle, turning it from a barren outcrop into a green resort almost overnight. Sand was transported in to create his own private beach. Bill Gates, the billionaire co-founder of Microsoft, and the pop star Madonna had both sought to buy the isle in the past.

Athina Onassis, 28, an avid equestrian now based mainly in Brazil, is known to have visited the island just once, to pay her respects to her mother Christina, who died of a drugs overdose and is buried on Skorpios with her grandfather and uncle Alexandros. “The last time she was there was in November 1998 to attend her mother’s 10-year memorial,” said Mantheakis, a former adviser to her French father, Thierry Roussel. “The three of us spent the night there but after that she never went back again.”

Athina is believed to have paid around EUR35m in inheritance taxes and maintenance costs since inheriting the isle. Hefty levies slapped on real estate by the Greek government in an attempt to reduce the country’s debt are also thought to have contributed to her decision to sell.

The tycoon’s only descendant, Athina came into her wealth at the age of 18. Her fortune included hundreds of works of art, properties and companies spanning three continents.

If she wanted to, she could dip into her 217 bank accounts to pay off the debts of most third world countries and still live comfortably. Although once known as the “poor little rich girl”, the heir in recent years has also sold off a number of Greek assets. To the surprise of friends and family, she recently auctioned the entire collection of her mother’s jewellery and a plot of land on the Athenian riviera where the dynasty’s ancestral home once stood.

“In one sense she has been a true Onassis in being totally unsentimental about financial matters,” said Mantheakis. “From what I know, all her cash is still in a trust formed by her father, which may also explain why she is selling assets.” While partly attributed to the Greek crisis, Athina’s decision to distance herself from her roots may also have as much to do with the notoriously bad relations she has with officials who run the Onassis Foundation.

A charitable organisation bequeathed by the shipowner to commemorate his son Alexandros, who died in a helicopter crash, the foundation cut ties with Athina for not speaking Greek and for her poor knowledge of the country and its customs. She was raised speaking Swedish to her stepmother and French to her father Roussel, the heir to a pharmaceutical empire.

Famously reclusive, the heir has remained tight-lipped about the latest sale. But Rybolovleva, 24, whose father Dmitry owns AS Monaco football club and has a history of snapping up trophy properties, says she regards her latest prized possession, which also includes the adjacent islet of Sparti, “as a long-term financial investment”.

By arrangement with the Guardian

Closure of the deal – the latest in a global shopping spree that has seen the sheikh’s property portfolio spread from London to Beijing – has been met with glee in Greece, the west’s most bankrupt state, and Doha, where the royal household experienced 18 months of excruciating drama to take possession of the outcrops.

“Greece is that kind of place,” said Ioannis Kassianos, Ithaca’s straight-talking Greek-American mayor. “Even when you buy an island, even if you are the Amir of Qatar, it takes a year and a half for all the paperwork to go through.”

The isles, known as the Echinades, caught the oil-rich monarch’s fancy when he moored his super-yacht in the turquoise waters off Ithaca, took in the view and liked what he saw. That was four summers ago.

When the royal eventually got off the yacht, he inquired about the pine-covered chain as he strolled about Ithaca in sandals and shorts. “They have a fund with a couple of hundred million in it,” enthused Kassianos, a former US economics professor who assumed the mayorship of Homer’s fabled isle three years ago. “And as far as I know they want to buy all 18 of the islands, the whole lot.”

The purchase, the biggest private investment in Greece, appears to have been a windfall for the Amir, who drove a hard bargain in a market where investors are few and far between. The first island, Oxia, initially came with a price tag of seven million before its Greek-Australian owners agreed to let it go for just under EUR5m. Last week, Denis Grivas, whose family has owned the title deeds to the other five almost since the foundation of modern Greece, also settled on a price.

“The islands have been in my family for over 150 years but we are not rich enough to be able to keep such valuable properties any longer,” he said, ruing the soaring taxes the crisis-hit Greek state has slapped on real estate. “We are very, very happy to see them go. They have been on the market for nearly 40 years.”

With their pristine beaches, ancient olive orchards and natural coves, the uninhabited isles are “an ideal opportunity for a solid business investment with unlimited possibilities”, says the high-end “private island online” site, describing the properties as Mediterranean pearls. “The potential for development is very big … from developing tourist-style Club Meds or hotel facilities, to villas to sell or rent.”

But the Gulf royal does not appear in any mood to create tourist resorts on the retreats. Instead, said Kassianos, his aim is to build palaces for the exclusive pleasure of his 24 children and three wives. The architects have already moved in, drawing up plans to create a private idyll, although he has run into trouble with Greek law.

“There is a stupid law because in Greece we do everything upside down,” lamented Kassianos. “That law says that whatever the size of your land, your home can be no bigger than 250 sq m. The Amir has reacted to this saying his WC is 250 sq m and his kitchen alone has to be 1,000 sq m, because otherwise how is he going to feed all his guests?”

To appease the locals, the Qatari, who is also being heavily courted by the government to invest in Greece, has promised to come bearing gifts. “His people said ‘what present can we give you?’ and I said the island needs water desperately,” said Kassianos. “A study to lay a pipeline from the mainland is already under way. That’s not bad when we’ve been trying to get a new port here for the past 40 years.”

The Amir plans to moor his yacht off his new property this summer. Locals on Ithaca are getting ready. An honorary citizenship beckons along with a feast fit for a very modern Homeric hero.

“The next time he comes we hope to get him and his family off his yacht and into our restaurants,” said Ithaca’s mayor.

By arrangement with the Guardian

But not a single euro has changed hands — none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.

“It’s all about exchange and solidarity, helping one another out in these very hard times,” enthused Ioanitou. “You could say a lot of us have dreams of a utopia without the euro.”

In this bustling port city in Greece, locals have come up with a novel way of dealing with austerity — adopting their own alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40 per cent of their disposable income as a result of policies imposed in exchange for international aid, the system has been a huge success. Organisers say some 1,300 people have signed up to the informal bartering network.

For users such as Ioanitou, the currency — a form of community banking monitored exclusively online — is not only an effective antidote to wage cuts and soaring taxes but the “best kind of shopping therapy”. “One Tem is the equivalent of one euro. My oil and soap came to 70 Tem and with that I bought oranges, pies, napkins, cleaning products and Christmas decorations,” said the mother of five. “I’ve got 30 Tem left over. For women, who are worst affected by unemployment, it’s like belonging to a hugely supportive association.”

Greece’s deepening economic crisis has brought new users. With ever more families plunging into poverty and despair, shops, cafes, factories and businesses have also resorted to the system under which goods and services — everything from yoga sessions to healthcare, babysitting to computer support — are traded in lieu of credits.

Other grassroots initiatives have appeared across Greece. Increasingly bereft of social support, or a welfare state able to meet the needs of a growing number of destitute and hungry, locals have set up similar trading networks in the suburbs of Athens, the island of Corfu, the town of Patras and northern Katerini.

But Volos, the first to be established, is by far the biggest. Until recently the city, 200 miles north of Athens, was a thriving industrial hub with a port whose ferries not only connected the mainland to nearby islands but before Syria’s descent into civil war was a trading route between Greece and the Middle East. Once famous for its tobacco, Volos was home to flour mills and cement factories, steel and metal works.

But, today, it is joblessness that it has come to be known for in a country whose unemployment rate recently hit a European record of 26 per cent, surpassing even that of Spain.
— The Guardian, London

In terms of perceived levels of public corruption, Greece was on a par with Moldova and Mongolia. In the 27-strong EU, there was no other state that fared worse.

For economic experts who were surveyed for the report, the finding will be further proof that Greece is not just an economic basket case that is only barely keeping bankruptcy at bay but entrenched in a crisis of values that, like its debt drama, refuses to go away.

For Costas Bakouris, the head of Transparency International’s Greek chapter, the survey underscores the desperate need for the nation at the heart of Europe’s financial mess to organise a fresh political way of operating.

“We need to create a political system where politicians care more about the fate of the country than themselves,” he said. “In short, we need to make politicians accountable.”

Most Greeks would agree. Corruption, as many now understand, was the thorn in the side of a society that held back economic enterprise and competition. It was their nation’s overarching affliction.

But the drop will also come as little surprise. And, for many, it will have less to do with the lack of role models — and punishment, or not, meted out to corrupt politicians — as it will do to the sheer need to survive.

In a country not only mired in a fifth straight year of recession but enduring a third year of unprecedented austerity, where one in three now lives below the poverty line and a quarter of the population is unemployed, corruption is a means to an end.

It is, say analysts, the flipside of austerity in an economy in freefall. “To survive in such a hostile situation, you have to bend the rules,” said political commentator Giorgios Kyrtsos. “There is no other way when things are so hard — you are forced to resort to corruption to deal with the state mechanism.”

Economics professor Theodore Pelagides says rampant tax evasion is a case in point. With VAT at 23 per cent, thanks to policies mandated by Greece’s creditors at the EU and International Monetary Fund, withholding of official receipts has assumed proportions that even by the standards of pre-crisis Greece have become chronic.

“People have been pushed to their limits. They have calculated in a very rational way that avoidance of such receipts is a necessity at a time when they have been hit by so many wage cuts and unexpected taxes,” Pelagides said.

This week another global survey conducted by the consultancy group Mercer found that, in Athens, citizens endured the worst quality of life of any major European city.

Desperation is on the rise with the state power company DHE reporting it is cutting off electricity supplies in an estimated 30,000 homes every day as bills, which now include a hefty property tax, go unpaid.

“Our country is being destroyed a little more every day,” said Tassos Vassiliou, who runs an electric supplies store in a downtown office.

“This shop has been in my family for more than 100 years and at Christmas we will close. We will open up in my family home next door, but don’t ask for a receipt because we won’t be giving them out.”

— The Guardian, London

In quick succession last week, all four countries announced, or intimated strongly, that they would not be participating in the jamboree. With the exception of Warsaw, each cited the debt crisis.

“It’s a great shame, very sad,” said the Greek singer Nana Mouskouri, who was discovered when she performed ‘A Force de Prier’, Luxembourg’s entry in 1963. “I couldn’t perform for Greece back then as we didn’t have television … I know the world progresses,” she said, “but the whole thing has just got so big, so expensive.”

That is why the competition that has come to be associated with kitsch costumes and iffy music has had to take a back seat for recession-hit nations. Amid the business of meeting budget targets, there is, alas, no room for froth or frizz.

“Public television ought not to participate in this year’s Eurovision contest in correspondence with overwhelming public sentiment,” said a Greek government spokesman, Simos Kedikoglou. “It is very unlikely that Greece will take part.”

With Greeks brought to their knees by the cuts demanded in return for keeping their insolvent economy afloat, officials insisted it would be “distasteful” to be seen to be competing in a contest “that is all about sequins and stage effects”.

“It’s not just that we don’t have the money to pay for the broadcasting rights and participation fees which, at 120,000 euros, we simply don’t have, at this juncture it would be morally wrong,” said an official at the state-controlled channel.

In Cyprus, whose financial woes were triggered by its banking sector’s exposure to Greece, the state broadcaster PIK went so far as to describe participation as a “possibly provocative” move, while Poland issued a statement saying: “After a very careful analysis we made the difficult decision not to take part in the contest in Malmo.” It will be the second year in a row that Poland has withdrawn.

Just days after tickets went on sale, there are mutterings as to whether, after 58 years, the institution Europeans love to lampoon can survive — at least as a phenomenon that reflects Europe.

Organisers brush off such suggestions, making the point that 38 countries have already signed up for the event — the most-watched show on European TV.

But agents such as Yannis Koutrakis, who represents Mouskouri and has looked after Greek celebrities who have participated in the show, beg to differ. “You’ve got so many countries, like Azerbaijan and Georgia, that are not exactly European which are now participating,” he said.

“If countries at the heart of Europe leave then what is left? Is it really a European song contest?” — The Guardian, London