Throughout my travels in Greece during the past six weeks one thing has become apparent: the Greeks are completely deluded about their fate. They just simply do not get it. There is a large swathe of opinion that wishes to keep the Euro and believes that this can be done merely by slashing public sector jobs and Government waste. They do not think that austerity and the need to be competitive applies to them. Why they are so attached to the Euro which has brought them such misery baffles me. I think some associate it with the vast grants Greece used to get and think those days will come again (dream on).
Others see being part of the Euro club as a matter of national pride. So let me get this straight, Germany is telling your politicians how to run your country stripping you of independence, will soon send over “observers” to oversee the state, you have been bankrupted and humiliated – in all thoroughly buggered by Berlin. When this happened 1943-45 it was not a source of pride, what is different now? Whatever the reason for this deranged love affair with the Euro, the big delusion is that austerity is a public sector matter only.
Certainly hundreds of thousands of jobs have to go in the Civil service and in the Post Office, utilities and railways as they are privatised. But the fact is that Greece will still not be competitive. I detailed HERE yesterday why prices must come down by 40% (either by leaving the Euro or through deflation) if the Greek tourist industry is not to be trashed by that of Albania and, God forgive me for saying this, Turkey.
And then there are the banks. There are stacks of them. I visited 10 within ¾ of a mile this morning trying to find one that would allow me to change some currency. Not my Albanian Lekke – I have them for life – but British £20 notes. Several advertised exchange rates on the door but only one actually offered the service. ATE bank was actually closed. I asked the gaggle of women outside why (fearing the worst) and they happily said they were on strike. Why? In protest because it was being bought by another bank (Piraeus Bank).
Now I suspect ATE is not exactly a cash cow and that this is a mercy killing. I would bet you 5000 Albanian Lekke that Piraeus Bank is itself not exactly rich as Croesus. This is two struggling banks merging to try to survive. And the workers reckon that strike action will stop it? Or do any good? The fact is that most, if not all, Greek banks are essentially toast. Ed Balls seems to think that having a large number of banks is good for the consumer. But if none of them have any money to lend (Greece) or either don’t have it or won’t lend it (the UK) you can have a zillion banks and it will not make any difference.
Keeping all these bust Greek banks going with taxpayers (that is German taxpayers) money allows Greece to pretend that unemployment is only 22.5% (it is really 27%) but it is a pretence. Austerity will also mean that most Greek banks have to merge and go bust and a lot of Greek bank workers will be fired. The pain in Greece if it continues down the current path will, not that folk here realise this yet, be felt across the board.
PS. I had to laugh on my bus journey today when I saw a stream of “men at work” signs in the road. It goes without saying that there were no men at work on the road at all. That is because the Government has no cash. Indeed not even enough to pay to collect signs put up ages ago when there were men at work. In fact since it was 3.30 in the afternoon I doubt there were very few men at work within 100 miles.