Well, let me give you some insight, being Greek myself.
First of all, I believe that this film is one that should have been recommended for an Oscar, not that I care about the Oscars terribly, but I mention it just for the record.
The film takes place in Constantinople - or Istanbul as it is widely known - before the Turkish invasion in Cyprus, that is the late 60s beginning of the 70s. Greeks living in Turkey had to speak the turkish language for obvious reasons, but their mother tongue was greek. In the film, when Fanis is still a little boy, his grandfather and friends, and the grown-ups in general, when they need to have a serious - usually political - discussion in front of the child, change from greek to turkish, hence pointing that little Fanis could speak turkish, but not to a very sophisticated level. Also, when Fanis' parents argued, they started in greek and changed to turkish.
Regarding the rest of the film when Fanis grows up to become Giorgos Coarraface (my personal favourite) and meets up with Saime and speak in english, I believe that they do that for a) practical reasons and b) it is proved throughout the film that little Fanis doesn't speak very good turkish anyway, so as a grown man has probably forgotten all he knew. It is quite true that the older generation of Greeks from Constantinople speak turkish very fluently, but the younger generations don't.
I hope this shed some light!
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