Anxious Greeks pull money from banks amid fears of capital controls – FT.com

One of the most-read articles in the FT takes a subjective look at  how ordinary Greek people are pulling money from banks amid fear of capital controls. It’s a must-read article. Check it out!

via Anxious Greeks pull money from banks amid fears of capital controls – FT.com.

According to the article ordinary people, including owners of small businesses and pensioners don’t trust the left-wing Syriza party, and are buying new cars or trying to move savings out of Greece.

There seems to be a hardening of positions between creditors and Greece’s government, with the substance of reforms being the sticking point. Personally, I fear that the Syriza government does not have the domestic political power to agree to further reforms. It looks increasingly likely that Greeks will chose increased poverty over reform. I sense that the probability of a major default from Greece is increasing by the day. In my judgement, a Syriza triggered default will be cause immense hardship in Greece. And I would expect contagion to impact the Eurozone and the world’s financial markets.

Thoughts?

One response

  1. Dr Alf’s grim prognosis is correct, since at the time we had the banking crash in the UK, Nationwide Building Society customers were reassured by the then Chancellor, Alistair Darling, that “Your money is perfectly safe”, but customers chose to disbelieve him and withdraw their money anyway.

    The Greeks have a Government that they placed their faith in, which employs people like Varoufakis, who even I can see is not to be trusted further than he can be thrown, on the basis of his total inability and unwillingness to answer questions and his unconvincing body language.

    This is why they withdraw their money and somehow are able in some cases to spirit it out of the country and buy cars.

    European Governments have in secret been preparing for trouble by agreeing to have brought in emergency “bail in ” legislation by the end of this Summer (1st September). They will doubtless attempt to do this, by amending existing statutes, which can often be done by Ministers without having to draw up new legislation, which would have to go before various Parliaments and be subjected to the full glare of public and media scrutiny.

    This Greek government was elected amid much fanfare on the basis that it told people what they wanted to hear rather than the truth. All of us in Europe will pay for this tragedy, irrespective of whether the Greek Government remains in the Euro with yet more good money thrown at it, or whether it leaves the Euro which it should never have joined in the first place and goes back to the Drachma.

    A bankrupt country is essentially what Greece is and it will remain that way until it broadens its economic base and its Government and people recognize that they cannot have even a modest standard of living on the work, effort and money of everyone else. People need to remember that Greece has benefited from EU structural funds, from countries like the UK and Germany, which have to make contributions bigger than anything they get in return and £300 billion in bailout funds not one penny of which has been repaid once interest is factored in.

    What we are being asked to do now is let the Greek people withdraw all the cash from their banks and write off what we have given them already and then give them some more.

    In addition the 5 plutocratic families, who have plundered much of Greece’s money, are presumably still at large, like many of the people in the UK and America who benefited from the banking crash and hid all their money in 40 different tax havens and then converted it into real property, gems, fine art and gold. The Greek Government is not going after these plutocrats and there is no sign of a “European arrest warrant” to allow these criminals to be captured and Greece’s plundered money brought back to Greece to allow the misery of the people there to be alleviated.

    Greece must now leave the Euro, return to the Drachma and start the painful process of restructuring and reform. We in the rest of Europe should provide assistance with advice, guidance and marketing so that children who are not to blame and are guileless innocents should have a future but we should not under any circumstances give that country a penny more because that will remove from Greek adults the consequences of their own actions and encourage others to want similar treatment.

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