Rocky times in Greece: Even on the idyllic islands there are signs of crisis

My next door neighbour on this small Greek island has had it up to here with the goats. They are, of course, his Albanian neighbours' goats. "They won't control them," he says. "Everything I plant, the goats rip up." I wait for talk of gunfire, but no. "Still," he says, "as the saying goes, better a bad year than a bad neighbour." The saying, of course, cuts two ways. Are they bad neighbours? Or does he not want to be a bad neighbour? There's a problem, true. It must be solved: also true. But there are also – to a degree which would astonish most northern Europeans – questions of neighbourliness to consider.

As with the man next door, so with Greece itself. Cast as the Bad Neighbour of Europe. Publicly told off. In trouble. What to do?

Not your problem, of course. School's out. Summer's in. Crank up the music, pack the suitcases. Off to Athens then (strikes permitting) a ferry to the islands. Excellent. You'll love it. I love it, and I spend far longer that I can reasonably account for in Greece. A good place to get some work done. Sun. A refreshing breeze every afternoon at 4.15pm on the dot. And the economy? Ah. Well... there's wine (better than the average tourist can imagine, because the average tourist can't think of Greek wine without the word "cheap" in front of it, so it's a downhill slope for the average tourist and an uphill struggle for the Greek wine industry). And of course we have olive oil, the finest probably from Lesvos plantations set up in the 18th century on land chosen according to an ancient and noble tradition of growing your best produce on land the tax-inspector can't find.

Cheese we have, too: halloumi from Cyprus, graviera from Crete, feta from the woman down the lane just past Agios Nikolaos, on the right just before the goat path leading to the headland which you don't want to wander down in the dark because of the precipice: a 1,000-ft drop onto a brisk lee shore, and when I say "shore" I mean rocks. Sharp rocks. Not that you will fall. Even in the darkest hour of the deepest night, if you get near the edge, Greeks will materialise and shout warnings.

Risk works differently in Greece. Northern Europeans don't get it. It terrifies them. I see it all the time on this little island where I spend far too much time: Britons – the kindly sort whose lives are built upon anxiety – walking around looking at the wiring, the potholes, the precarious scaffolding, the almost entire absence of warning signs, with wrinkled brows and tight lips, murmuring in disbelief to their wives. "Madness," they hiss sotto voce, filled with glee. "Lunacy. Have these people never heard of risk assessment?"

Yes. Yes; they have. And they have collectively decided that it's up to you. Fail to understand that, and you fail to understand anything about Greece at all, whether it's the question of why, outside the cities, they drive in the middle of the road; or why the economy is in the mess it is; or why the populace has taken to rioting and striking in the face of the economic strictures imposed by the IMF and the EU (read: America and Germany). That, and the parea, are the keys.

Actually, the parea is the key. The key to how it works; the key to why you won't notice anything amiss; the key to why it will – despite what northern Europe believes – turn out okay.

We don't have a word for it in English. We don't have an "it" for it, really. Literally, it means "company"; conceptually, it's something a bit like neighbourliness. The nearest we get to it is Old Etonians: a group bond which may include blood-relations but goes beyond them: an extended family, a pack, a clan, a tribe. The parea is the core of Greek life. Like friendship, only more so. Once you are part of a parea, it's loyalty for life. You will do business with your parea, you will drink coffee with them, marry their sisters, look after their children. When things go wrong, you will help each other. And everyone else can... well, not exactly go to hell, but if common sense (or advantage, or "efficiency") dictate one course and the interests of the parea another, the parea wins every time.

It's not that much of an exaggeration to say that, whenever you see something in Greece that defies northern European "rationality", the trick is to identify the parea interests behind it: the Greek ferry timetables; the mad inefficiency of the plethora of different booking agencies – you don't book a journey, you book a particular ship, and if you don't know its name or the operating company, too bad; the need to know who to have a word with; the inexplicable failure of recent attempts to open up a seaplane service among the Aegean islands; the doggedness which shades into intransigence; the current economic mess.

And, yes, the open trenches, dangling wires, wandering goats and people driving up the middle of the road. Because safety is something the parea looks after. Greeks don't need the government telling them to be careful. The hazards of life are there, visible, out in the open. You can see the trench. Everyone knows not to touch wires. You drive in the middle of the road because there might be people walking on the side of the road. Goats? Don't talk to me about goats. The risks are a matter for the individual, and the individual is part of the parea.

How unlike Britain or Germany, where we do our best to remove all hazards from sight, issuing, instead, often incomprehensible diktats designed to prevent any engagement, and hence any risk. Paedophile horror, latchkey kids, old folks' homes, inspectors of this and inspectors of that, drunken youths making life miserable: the parea takes care of that kind of thing. The parea is a natural product of that same sunshine and sea – that scattered rockfall of disconnected, sun-parched archipelagos on which 40 per cent of Greeks live, and to which most of the rest seem to migrate in the summer; you may live in Athens, but you're from Kos, or Chios, or Patmos or wherever – which are fine tourist destinations. Such things make for hard living when that's what you're stuck with, and hard living makes for clannish loyalties.

The middle class, with its luxurious individualism, has only recently begun to rise in Greece. Before that, it was a peasant majority and a rich minority. Stony ground or shipping. And both the maritime dynasties and the goat-and-olive-grove peasantry had, and retain, their parea. In a nation which rose and fell, fragmented and Balkanised, never had the luxury of a Renaissance or Enlightenment or Romanticism –- poor Greece, always the object of wealthier nations' fantasies, never of its own reality – nor the massive wealth of a modern empire or industrial revolution, the parea was the one consistent source of strength. But, as always, the strength was also a weakness.

We all know what has happened. Greece has been running a deficit of what now seems to be almost 14 per cent of its annual gross domestic product. It is over 100 per cent of its GDP in debt: that's around a quarter of a trillion pounds. And as you close your suitcases, check your wallet and head for the airport, you might pause to wonder where you fit in. The answer is: crucially. Overseas tourism accounts for about 20 per cent of the Greek annual income. Everyone agrees it's down this year. Some say by as much as 10 per cent. If I stroll around my local town (perfect natural harbour, lights twinkling across the bay, zeimbekiko and rembetika music bouzouking on the balmy air, everything as it should be), I see more empty tables and quieter bars than this time last year. More boats-for-hire bob at their moorings, unhired. The knick-knack shops for tourists display less stock. It's not catastrophic; it's far from being even vaguely bleak; but it's noticeable. Ten per cent down on that 20 per cent: if it's true, that's 2 per cent off GDP – even as Prime Minister George Papandreou has committed to bringing the budget deficit down below 3 per cent of GDP by 2013. That's where you fit in.

But I have two predictions to make. First, you won't notice. And, second, because of the parea, it will come out just fine in the end.

What you will, of course, notice is that Greece is no longer a cheap holiday destination for Britons. Over the last few years, about a third has been knocked off the buying power of sterling in the eurozone. That cheap-but-simple dinner of souvlaki and retsina is now a perfectly reasonable dinner but you'll not be saying, "Imagine what you'd pay for this in Camden Town, let alone the bouzouki music and the soft sea breeze." If (as some have been speculating) Greece overnight got the hell out of the euro and went back to the drachma... that would be a different story.

Nor will you see the other stuff. You won't see the rumoured frenzy of rich folks' pool-boys in villas in the up-market Athens suburb of Kifissia summer villas rushing to pull the covers over the swimming-pools in the belief that Google Earth (used by the newly galvanised taxman to spot the undeclaredly prosperous) is somehow live. You won't listen to a man telling you how his doctor declared an income of €1,500 (£1,230) last year, nor will you later hear that doctor complaining how his dentist only declared €1,000, even though the dentist's invisible swimming-pool is bigger than his own. You won't hear people on Island X working out that if all the grant-attracting olive trees were actually real (rather than fiscally real), Island X would have to be the size of Crete, which it isn't, nor that if all the people who had grants to go on various courses actually went on those courses, then 102 per cent of the adult Greek population would have to be teachers.

You won't hear how the pompous puffed-up consultant at Hospital Y touted for a bung of €1,000 in order to operate on you before you actually died. You may notice that – evidence of a new leaf turned over – you got a formal till receipt for your drinks at that pretty bar high on the hill overlooking the blue-domed town as it tumbled down to the rocky bay. A receipt, with tax number, VAT amount and owner's name and address. You probably won't notice that the local Greek family at the next table never did, though. You may notice the new anti-smoking law is coming into effect this summer; the third time they've tried, I think, but the government has announced that this time they really, really mean it. And they probably do: enforcement means fines for non-compliance, and since compliance has never, ever been a feature of the Greek psyche, it means, in effect, revenue. The same with motorcycle helmet laws, speeding laws, parking tickets, vehicle taxation and building permits.

You'll not hear the tales of the tax inspectors going round town downloading the till records into their little laptops, or of the shopkeeper getting an automatic €1,200 fine because he'd lost the disk with the Secret Till Code on it. Nobody will tell you about how he or she got fined for not having Permit Z because the civil servant responsible for issuing Permit Z had not opened his office for five days running because he'd been downgraded for unjustly being accused of fiddling the books. Nobody will complain to you that their Albanian electrician had to give up and go home because the local tradesmen wouldn't pass on, not only work, but the mysteries of the trade, like where the mains high-voltage cable was and who in the island's local government to have a word with.

You won't notice, either, the (temporary, perhaps) halting of building projects and business plans for complex reasons of tax avoidance and planning regulations, or the rash of "We Can Help You" posters in bank windows, offering easier terms for the newly emerging Greek mortgage industry, because, God knows, the last thing they want is defaulters.

But the big change is signalled by the demonstrations and strikes. Firstly, there is a great Greek tradition of rioting, just as there is a French tradition of barricading the streets and blocking the railway lines. There is also a slightly less helpful Greek tradition – ironic, given that it was the place it originated – of painfully acquiring democracy and then throwing it away again. Students of ancient history might note that the golden age of Greek classical antiquity was also an age of more or less continual war. When Aeschylus, Sophocles, and Euripedes were writing their tragedies, almost 20 per cent of the city-state's young men were casualties of war each year. Pericles's great funeral oration was built on a vast heap of young bones.

Warfare has been a staple of what is now the Greek nation for over 2,500 years. And the notable Greek bull-headedness is also a relentless refusal to bow to public opinion or give in to adversity which defeated the Persians some 2,460 years ago and only in the last 100 or so years forged a profoundly patriotic nation out of fragments: a nation that maintains a pride and patriotism absent or frowned-upon in Britain and literally unspeakable in Germany.

Behind the noise and occasional violence lies a significant change that the visitor, passing through, is unlikely to notice. The Greeks – the collective of pareas if you like, not the government – no longer speak of this man's tax evasion or that man's cheating the system with pride. It has suddenly stopped being an amusing joke.

All the same, in the end, the Greeks are not the Germans. Nor want to to be. Around 1.5 million Greek people died in the Second World War, victims of a monstrous famine brought about by the Nazis, who explicitly declared the Greeks to be savages, little better than animals, who should be treated with utter brutality from the outset. Those little picturesquely bent old ladies on the postcards? There are still a few left. Ask them how they got picturesquely bent, and what happened to their husbands.

Greeks are not Germans, and the belief that they will, or should, be is as foolish as Tony Blair's fantasy that 24-hour pub opening would bring about a "café culture" in Britain. Greece, Italy, Spain and Portugal are utterly different from the northern European nations, and have an equal amount in common with each other. Perhaps, as the economist Tony Rudd has suggested, the the notion of two euros – one for the south, one for the north – is the answer.

And now, as a friend put it the other day, "The riots, the shouting, the marches: these are signs that we are taking the problem seriously. We have realised this mess is true. And so now we will deal with it. You wait. You'll see."