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Riot policemen defend their position beside a burning van during violent protests against austerity measures in Athens' Syntagma (Constitution) square, June 28, 2011. (Yannis Behrakis/Reuters/Yannis Behrakis/Reuters)
Riot policemen defend their position beside a burning van during violent protests against austerity measures in Athens' Syntagma (Constitution) square, June 28, 2011. (Yannis Behrakis/Reuters/Yannis Behrakis/Reuters)

A tale of two Europes Add to ...

Petzetakis likes to call itself the first Greek multinational. The company began making plastic pipes and hoses in the early 1960s and grew steadily over the next couple of decades, opening a plant in Portugal and pushing into Germany.

Proud of its role as a pioneer, the firm dreamed of bigger things.

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Opportunity came when Athens joined the euro at the turn of the millennium. Like other Greek companies, Petzetakis feasted on the easy credit that was suddenly available to it, snapping up smaller rivals around the world.

But when the global financial crisis hit, the firm found itself overstretched. Late last year, it shut its main plant in Thebes, a provincial city of around 30,000 people an hour's drive north of Athens, and stopped paying its workers. "They employed 150 people from the area," said former employee Spyros Megaritis two weeks ago. "Since November we don't work unless we are paid what we are owed."

The company's German plant is busier than ever.

Woe is a relative thing in the euro zone - and nowhere is that more striking than in a comparison between Greek and German manufacturers. More than 1,600 km (1,040 miles) north of Thebes, in a town outside the German city of Stuttgart, Stefan Wolf also grapples with the consequences of operating with Europe's single currency. The impact for the chief executive officer of car parts supplier ElringKlinger, though, has been much milder.

Greece's debt crisis has boosted rival currencies such as the Swiss franc, Mr. Wolf said, sitting in an airy room that looks out onto the Swabian Alps. That's made financing ElringKlinger's 2008 acquisition of a Swiss company more expensive. "It is hard to predict the extent of costs related to forex overall, but to a limited extent there may be some negative currency effects. On the other hand, though, a weak euro is certainly a good thing for German business and exports and many companies may well benefit."

These contrasting fortunes tell the story of two Europes - and the story of the euro itself. Euro zone membership plus low labour costs were supposed to be a winning combination for Greece. In those early days of the common currency, Germany was the sick man of Europe, weighed down by the costs of reunification and an expensive labour market.

Since then, rising labour costs in Greece have forced many manufacturers to shift to Asia or eastern Europe, or even to countries like Germany, where productivity is much higher. Germany, meantime, has thrived. Hard years of reforms have helped it to strong jobs growth and record exports.

Now, Greece is the one facing hard times. To avoid a default, Athens is negotiating with fellow euro zone members and the International Monetary Fund for a second bailout. The country faces massive unemployment, years of austerity budgets and even possible ejection from the common currency.

The euro was meant to bring Europe together. Instead, it's splitting the currency bloc apart. Greeks are furious that its rescuers, led by Berlin, are imposing ever tougher conditions on the aid Athens receives. Germans are baffled that they should be burdened with the cost of rescuing what they see as a badly managed country.

It's all, thinks Mr. Wolf, part of a much deeper problem. "There is too much country-specific nationalistic pride and egotism," he said. "The problem is that countries have to start thinking that they are part of a union. Currently they don't."

BY THE NUMBERS

Study the basic numbers and it's easy to see that despite sharing a currency, Germany and Greece are miles apart - and not always in the way you might expect. For one thing, Greeks work about 30 per cent more than Germans, at least according to the Organization for Economic Cooperation and Development, which put the average number of hours worked in Greece in 2009 at 2,119 compared with just 1,390 in Germany.

Less surprisingly, the rewards in Germany are considerably better. According to one Greek labour union, average gross annual wages in the Greek private sector stood at €28,548 in 2009 against €43,269 in Germany.

That gap continues after retirement. An average 40-year-old German, who works until the normal retirement age of 67, could reckon on a pension in the region of €2,200 to €2,600 a month. In Greece, where the mandatory retirement age is 65, many people retire in their late 50s under generous rules that define many types of industrial work as "hard and unhealthy labour." An average blue-collar worker there can expect a pension of less than half the German level.

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