THE eurozone finance ministers’ message to Greece on Thursday night was stark: there will be no new bailout — and the Greek nation will go bankrupt — unless Athens finds a further 325 million euros of budget cuts, on top of the 3.3 billion euros of austerity measures already promised.

There will have to be yet more cuts in a country already reeling from an unprecedented squeeze on spending that has been accompanied by higher taxes.

And that, undoubtedly, will mean more customers at Klimaka, a red building in the heart of the capital that is a shelter for the homeless.

Few institutions have better first-hand experience of the impact of Greece’s austerity measures — and few have better first-hand knowledge of Klimaka — than Lambros, an out-of-work plasterer who joined the ranks of Greece’s unemployed when poverty caught up with him last year.

“From one day to the next, the economic crisis hit me,” says the 55-year-old father of two. “Suddenly I was fired without any compensation from the company I was working at. Two months later I couldn’t even afford my rent,” he sighed. “All my savings had gone on paying medical bills for my late wife.”

Evicted from his flat, the softly spoken plasterer then joined the thousands of Greeks, hit by job losses, wage cuts, tax rises and runaway prices, who have been forced to move outdoors.

“I didn’t want to burden my children with my problems because they have problems, too. I didn’t want to sleep on the streets either. So for four months I slept in my car,” he says pointing to a battered, bag-filled Toyota outside the shelter. Until, that is, he could no longer afford petrol for the vehicle that had become his home. “Then I heard about Klimaka. But it was a big step asking them for a bed. I felt very ashamed.”

A new underclass has emerged in Greece. A recession that began with the global financial downturn in 2008 but which has worsened dramatically as a result of EU and IMF-dictated austerity in the past two years, has left 20,000 Greeks without a roof over their heads, according to social workers and NGOs.

In a nation where joblessness is now more than 20 per cent, with no family untouched by it, the sight of people sleeping on pavements and park benches, in metro stations and shopping arcades, doorways and cars, is the most visible sign yet of an economy in freefall. More than 10,000 people have been decanted on to the streets of Athens, home to the vast majority of Greece’s 11 million population. The government has just announced emergency aid for the destitute and the Greek Orthodox Church has revealed it is feeding 250,000 people a day.

“Before the crisis, homelessness wasn’t visible in Greek society and was very low compared to other EU countries,” explained Ada Alamanou, Klimaka’s spokeswoman. “But in the last few years it has increased by 25 per cent. We call them the ‘new homeless’ because it is a rise that can be attributed solely to economic reasons,” she said.

“They are not people who have psychological problems or are suffering from drug and alcohol abuse. They are people who haven’t been able to pay off their credit cards and mortgages. The crisis is hitting the middle class.”

Even before Greece’s debt drama, a fifth of its population lived under the poverty line. Now over a third can be considered officially impoverished, according to the statistics agency Eurostat.

As temperatures plunged to some of the lowest levels in living memory this week, municipal officials rushed to accommodate the homeless in hostels, hotels and other emergency centres. At night, groups of doctors and social workers took to the streets offering blankets and first aid. Educated professionals, too shamefaced to want to speak, now stand in line with immigrants from developing countries waiting for food handouts from the town hall.

“We are very close to this becoming a full-blown humanitarian crisis,” said Giorgos Apostolopoulos, who heads Athens’ municipal homeless shelter. “If these economic policies continue the situation will get a lot worse. It’s shocking. Well-dressed people who own laptops and mobiles are finding themselves with nothing, out on the street.”

Austerity has not only exhausted the Greeks. Anger is also mounting, evidenced by Friday’s protests. The prospect of more cost-cutting reforms — required, say creditors, to avoid a default in March when the country has to repay 14.5 billion euros in maturing bonds — recently prompted Greece’s spiritual leader, Archbishop Ieronymos, to warn of a “social explosion”. — The Guardian, London