Among the casualties of Greece’s economic turmoil last summer were bookings at To Kyma, or The Wave, a low-key beachfront restaurant and hotel that looks onto the Aegean Sea on this northern Greek island.

As capital controls were put in place to avoid bankruptcy at the height of the then-crisis, Paris Laoumis says all his reservations were canceled for July and August. And his resentment of Greece being the “poor partner” of the European Union grew.

And then came the boats. Less than 10 nautical miles from Turkey, the rush of refugees into Europe came literally to his doorstep, his views of the sea marred by a growing pile of discarded life jackets.

And Mr. Laoumis, like many Greeks, forgot about increased taxes and harsher austerity imposed by the EU. The island’s fishermen saved lives, and those on shore cared for the children arriving. Everyone played a part.

Laoumis sums up sentiments on Wednesday: “We can sleep well at night."

In many ways, frustration at EU policy has grown with the refugee crisis. Greece’s geography puts it on the front lines, its economy is still reeling, and many say the EU has done too little for the struggling nation. But amid the wave of migration that has hit Greece, something paradoxical has happened: a renewed sense of pride has followed in its wake, something that has been glaringly absent since the nation received its first bailout in 2010.

"Last summer, we were the ones actually blamed for not following the rules. We were the ‘bad boys’ of Europe," says Kostas Bakoyannis, the governor of the central region of Greece. He has opened two refugee centers in former hotels in his region. "Now suddenly we are the good boys and girls of Europe. We have been following the rules, and we are asking others to do the same."

Compounded crises

Austerity has led to a half-decade of strikes, increased poverty, and unemployment. Up to 60 percent of youths have no jobs. Greece is currently trying to agree to the terms of its third bailout, worth $98 billion. The leftist Syriza government that campaigned for a debt write-off and an end to austerity has found itself hemmed in by EU demands – primarily from Germany – that it continue following a harsh financial prescription or face insolvency.

And as jobs have disappeared, so too has the notion of philotimo, which translates directly into “love of honor,” says Greek historian Thanos Veremis. “Greeks at the present moment are in total disarray. We have never been so confused as we are now,” he says. “When you stop being able to help your children do well you are nobody. That is where the true test of philotimo lies,” he says.

The refugee crisis, then, hits Greece at its weakest moment and widened its divide with Europe. The country has been panned by Brussels for its failure to properly process claims or provide livable conditions to asylum seekers. Until new rules were implemented and borders were shut, Greece had relied on waving newcomers onto northern Europe, saying it simply can't cope.

No place has been more overburdened than the island of Lesbos. In a single day last September, 9,725 people arrived – the island’s record, says mayoral spokesman Marios Andriotis, and one that rivals the pace at Ellis Island. [Editor's note: The original version misspelled Mr. Andriotis's last name.]

Melanie Stetson Freeman/Staff Huge piles of life jackets lie in the dump in the northern part of Lesbos near Skala Sikamineas, Greece. Each jacket represents a migrant who came over by boat.

In Lesbos, while nongovernmental organization (NGO) workers have booked hotels and dine in restaurants – for the first time ever, Laoumis’s restaurant has stayed open through the winter – other longer-term forms of tourism are down, says Giannis Samiotis, president of the Association of Tourist Agencies in Lesbos. Charter flights have dropped by 60 percent. Just one third of the usual cruise liners are planning on docking here this season, he says.

“They have left Greeks to deal with this problem alone,” complains Ignatius Psiouxlos, as he loads 170-lb. bags of olives from a grove in the mountains above the sea – the main source of income for Lesbos – into a truck to be pressed. “It is not our problem. Look at our unemployment rate. First we must help our people, and after that the refugees.”

Restoring philotimo

But it has also led to a fury of activism, from community kitchens to volunteer life-guarding across Lesbos, restoring something fundamental to Greeks: precisely their philotimo, Mr. Andriotis says.

“I believe that the way we have managed the crisis represents the core European values of solidarity, of respecting human rights, of supporting people who need it,” Andriotis says. “We as Greeks are considered to not do too much work, that we depend on other people’s money, we are lazy … This is an example of how people with severe financial problems respond to a large-scale humanitarian crisis. … And it shows exactly the Greek philotimo.”

Lesbos has mobilized in part because residents are sitting right in the middle of it, says Stratis Valiamos, a fishermen at the northern port of Skala Sikamineas, whose boat sits just a few yards from Laoumis’s restaurant.

On a recent sunny morning, as he untangles his net with his father-in-law, Mr. Valiamos talks reluctantly about the people he’s rescued in the past ten years, including those he’s had to jump in the water to save – earning him, as part of a group, a nomination for the Nobel Peace Prize – and those he has seen drown. He does not consider himself a hero. “Anyone who would encounter the same situation would help,” he says.

Melanie Stetson Freeman/Staff Fisherman Stratis Valiamos (l.) sorts out his nets, in early April near Skala Sikamineas, Lesbos, Greece. He and other locals have been nominated for the Nobel Peace Prize for helping migrants.

Many say he is just being humble – and in fact embodies a spirit of openness born from Greece's history of emigration and its experience with forced immigration. Skala Sikamineas, a tiny, picture-pretty port on Lesbos' northern coast, in fact started as a refugee camp – after Greeks were expelled from Asia Minor during a failed military intervention in 1922.

“This experience has created a footprint in Greek minds,” says Sotiris Chtouris, a sociology professor at the University of the Aegean in Lesbos.

Part of an openness to refugees in Greek society also lies in the reality that Greece has been merely a transit country to more prosperous nations like Germany or Sweden. That’s why their "neo-Nazi" party Golden Dawn hasn’t been able to capitalize on the crisis as the far right has elsewhere in Europe. Right now migrants are stuck in Greece only because Macedonia closed its borders.

“Greeks are suffering from six years, she cannot stand on her own, we know that,” says Mohammed Ali, who arrived from Syria in March and spent the month translating for volunteers at the main port of Athens. Many migrants preferred to stay in tents at the port than move to asylum centers far away “because people are afraid about being forgotten in Greece,” he says.

'Accidentally prepared'

Greece’s financial troubles have, unwittingly, trained them to respond to the refugee crisis. Communal kitchens emerged in Athens in 2011, and the activists behind the solidarity movements that sprouted across the country have now adopted the concept for refugees on the island.

“We were accidentally prepared for this,” says Stratis Nikolaou, who is volunteering to feed asylum seekers at a municipal camp on Lesbos, as he stirs a giant metal pot of lamb stew, asking onlookers to smile at it so that it tastes good.

It's also caused new thinking about their place in Europe.

Melanie Stetson Freeman/Staff Volunteers, including Stratis Nikolaou (l.), at the independent Kara Tepe camp for migrants cook a hot meal in early April in Lesbos, Greece. Mr. Nikolaou prefers to call it a 'welcome center' from which the migrants can come and go freely.

Despite all their frustrations at their economic plight, Greeks in their majority have always wanted to remain within the EU. Their “no” vote in last year's referendum, they say, was not a rejection of the EU but a vote fueled by anger, exasperation, and no small degree of humiliation – as the heirs of the founders of European civilization on the brink of being cast aside by it. Few thought it meant they’d eventually be kicked out of the eurozone, but their vote was risky, underscoring exasperation with the European project.

On one hand that gap has grown. Europe has finally shifted attention to Greece's migrant crisis, but only to implement its controversial EU-Turkey deal to deport those back who arrive and don’t get asylum. Mr. Nikolaou, who voted "no" in the referendum, believed in the EU but says Wednesday it has gone “off the tracks, away from its original ideals.”

On the other hand, it has shown Greeks' age-old interdependence with Europe. At the ground level of crisis, it's simply brought more Europeans together. NGOs and volunteers from across Europe have converged on Lesbos to help Greece cope. Stavros Mirogiannis, who retired from the Greek military, runs a camp for migrants that he calls his “village” – in fact he eschews the word “refugee” or “migrant” in favor of “visitors.”

“Welcome to my village, my island, Greece, and Europe,” he says cheerfully. “We consider ourselves here the ambassadors for Europe.”

Politically, Governor Bakoyannis says the refugee crisis has also served to improve what was arguably the most contentious relationship in the EU. “The refugee crisis has actually helped strengthen Greek-German relations,” he says. “Germans and Greeks are in the same boat.”

'The best Europeans'

Chtouris, the academic in Lesbos, says that the refugee crisis has reinforced the notion that Greece and the EU belong together, like a family.

“Sometimes members of the family are not behaving well,” he says. “Sometimes they show their bad face… Europe is now showing the dark side of the EU. They are not supporting us but only asking us to implement regulations, from a country that is on its knees. At the same time, we have to stay in this family. There is nowhere to go.”

He recently returned from Idomeni at Greece’s northern border with his spirits renewed. Volunteers from across Greece and Europe were there helping thousands of migrants stuck behind a Macedonian barrier. “These are the best Europeans,” one of the volunteers remarked to him.

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And he agrees. “I think this is a light for Europe,” he says.

Melanie Stetson Freeman/Staff A woman walks past a sign on a quiet street that says 'Migrants welcome' in Mytilini, Lesbos, Greece, in early April.

This was part 1 of Who is 'Europe'?, a weekly series on how European natives and residents are responding to pressures from terrorism, migration, nationalism, and the 'European project.' See all of the stories on the series homepage.