In Greece, the people carry on servants carry posters that read "I'm not paying" during a massive demonstration in Athens.By Dody Tsiantar, contributor

NEW YORK (Fortune) -- The Greek maelstrom that's roiled the world's markets for the last two months is more than a matter of embarrassment for its government. It's become a matter of survival for Greeks.

The individual belt-tightening that's coming is inevitable -- and as the Lenten season begins, most Greeks know it deep in their guts. They understand that for the government to dig their nation out of this crisis, their only choice is to rein in their lifestyles. Indeed, recent polls show almost three-quarters of those surveyed are willing to make whatever sacrifices are necessary.

"It's a wake-up call," says Marios Evriviades, international relations professor at Panteio University of Political and Social Sciences in Athens. "It is the first time that everybody is realizing that after years of living beyond our means, it's all coming back to haunt us. It's the only hopeful sign, actually. Greece has no choice but to reinvent itself."

Reinventing Greece and cleaning up after years of overindulgence, however, is going to be a task worthy of Hercules. "The time has come to pay the bill," says Alexi Papachelas, the editor of Kathimerini, Greece's most influential daily newspaper.

And paying that bill, with the economy in the middle of a recession, is going to hurt. Prices and unemployment are already heading north -- the jobless rate in November hit 10.6%, its highest level since March 2005.

Many workers, like Kiriakos Topalides, an employee in a medical company, are looking for a second job to make ends meet. "It has become impossible to cover the costs, let alone save for the future, on one job alone," he says.

Loans aren't easy to get either, even for those with good credit. Says attorney Roxani Avgerinou: "Everything is frozen. Lenders aren't willing to take on any risks at all."

As a result, future investments and plans are on hold. One developer last month postponed the pending purchase of three buildings, anticipating that prices would drop. A well-known Athenian gynecologist even reports that three of his patients terminated pregnancies because the women felt it was an inopportune moment to have a child.

"Greeks have come to the conclusion that the party is over," says Eurobank's deputy CEO Nikolaos Karamouzis. "Fear is widespread."

Even the state's 840,000 employees, with their cushy work hours, long vacations and extra paychecks at Christmas and Easter are beginning to realize that their perks may not be as secure as they once believed. The government has said it will freeze wages and hiring, introduce taxes on benefits in some cases and delay retirement requirements.

Some state employees, like navy officer Takis Demerakis, age 52, are retiring early, even if it means a lower pension, to avoid, as he puts it, "the upcoming tax increase on my salary and drastic cuts in my benefits."

Greece's active unions aren't going to take the cuts without a fight. Farmers staged a three-week protest to preserve agricultural subsidies, and on Feb. 10, thousands of hospital workers, air traffic controllers and teachers demonstrated, paralyzing the country for 24 hours. Customs officials launched a strike this week; even tax collectors have staged a demonstration.

"Things are getting so bad," says Stavroula Diamadara, who works at a municipal cemetery in Kifissia, an affluent suburb of Athens, "We've had to drastically reduce our daily expenditures, which means less food, less clothing, less everything."

A reduction in household spending is already pressuring local businesses. Margarita Tampakidis's family owns a housewares and furniture shop in Chalandri, a suburb just north of Athens. She says sales were flat in January, but this month they've already plunged 10% -- and more worrisome, the store's foot traffic is down 40%.

Demetra Kakopierou, who owns two children's furniture stores in Athens, let the lease on one of her stores in the coastal suburb of Faliro expire because the rent was too high, and the owner wouldn't renegotiate the terms.

"He wouldn't even consider it," she says, adding that she put all her stock in a warehouse until she finds a store at a more reasonable rent. "It's a real shame. Everyone needs to do their part, but a lot of Greeks don't understand that."

She has a point. Greeks have an uncanny ability to live large -- and many still seem to think the money pit is bottomless. "Greeks like to spend but they'll have to change their habits," says Timos Melissaris, a private investor.

But old habits die hard. This past weekend, Greeks enjoyed a 3-day holiday to mark the first day of Lent; lines at the highway tolls just outside of Athens on Friday snaked back for nearly two miles as people headed to the countryside for a short vacation.

"Crisis? What crisis?" says Kakopierou. "Greeks aren't about to give up their good time." But perhaps, like the Carnival before Lent, it's the last hurrah before the Spartan austerity takes over.

--Additional reporting from Athanasios Ellis in Athens To top of page

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