Greece is drowning in debt and atrophying from austerity. Or is it? It depends on whom you speak to, as Mark Wood found out on a visit to Athens. One story remained constant though: tax evasion is rampant.

It was a smart little shop, in a district close to the Acropolis down a cobblestoned lane, not abundantly stocked but with traditional delicacies from around Greece.

What you see on TV about poor Greek people is a fantasy

The owner, a young man at the counter, was quick to offer a discount on a can of “the best olive oil in the country”. He sounded a little desperate to sell. Was he going through a tough time, with all this debt and austerity eating away at people’s spending power? How was business?

His answer was unexpected: “Seventy per cent of people in Greece own property or land. People have jobs. In summer, everyone goes on holiday and has fun.”

He was struggling to make himself understood in halting English but his point soon became clear enough: “People have money. But it is, how do you say... the parallel economy... the black economy. Shops employ people and it’s not declared. They pay rent to the landowners in money that doesn’t show. The Greeks have €65 billion in local banks but €300 billion in foreign ones.”

His eyes narrowed but his tone wasn’t hushed, as if this was all quite normal and acceptable.

“It’s the system that does not have money. People do have money. And now the politicians want to take it from us. What you see on television about poor Greek people is a fantasy.”A question aimed at getting a feel of how the austerity measures being forced on Greece are crushing its citizens had turned into a confirmation of a stereotype: the Greeks as a nation of incorrigible tax dodgers.This was later reconfirmed by International Monetary Fund and European Commission representatives who are in Athens to ensure the government puts in place the financial, economic and administrative reforms necessary to put Greece back on a path of recovery. Time after time, tax evasion was referred to as a serious problem, one of the major factors that has dug Greece deep into its hole.

Of the two inevitabilities in life – tax and death – the former only seems to visit those on a payroll. By comparison, the self-employed, ranging from the small business owner to the dentist, the land-owner to the lawyer, hardly pay any tax at all, according to one high-ranking European official who has studied the problem. New figures from the IMF show that three quarters of the country’s tax take comes from working people, who account for only a third of national income.

And it is the ordinary worker too that has borne the brunt of austerity measures, with salary, pension and workforce cuts, some still to come, leaving a trail of ruined hopes and lives in their wake.

The word “sacrifice” was another term that cropped up time and again in meetings with both Greek ministers and international officials. They highlighted the hardship being suffered by one segment of the population as opposed to the relative immunity of another that does not contribute its fair share to the state.

“The population is suffering a lot,” said Panos Carvounis, head of the EU’s representation in Greece. “There has been a lot of reduction in the quality of life.”

A tourist guide at the hotel said Athenians frequently used to go out for a coffee in the evenings but the city had quietened down; they just can’t afford the coffee anymore.

EU figures bear them out: 25 per cent of the Greek population is at risk of poverty (by comparison, in Malta the figure is closer to 15 per cent). And that’s a two-year-old statistic.

Athens is a divided city; of the haves and the have-nots. Or those who do not pay tax and those who have to.

Former Greek Prime Minister George Papandreou had one thing to say yesterday: “We have huge tax evasion in Greece. Who wins? Those who have more money.”

Brief history of Greek bailouts

At the turn of the decade, Greece was on the verge of bankruptcy, partly a consequence of the government spending beyond its means for many years through money that was borrowed cheaply.

In May 2010, the first assistance programme for the country was agreed with the eurozone, consisting of a €110 billion loan to pay pensions and salaries in exchange for tough conditions that included higher taxes and pay cuts.

That did not go far enough and Greece soon found itself in a similar situation – on the brink of defaulting on its enormous €300 billion debt. So a second bailout has just been agreed with the IMF and the eurozone, of just over €100 billion, together with private bondholders agreeing to write down a similar amount of Greek debt.

This time, though, there are also funds to help drive economic recovery and growth. An economic catastrophe – for Greece and the rest of Europe – has been averted... for now.