Those of us who are not Greek ought to be pretty happy today, relatively speaking. Two out of three leaders of the Greek coalition government seems to have approved the German diktat requiring concentration camp style austerity, and the Parliament will either accept it or reject it on Sunday. It could be close.
A lot of people out on the streets of Athens and other Greek cities seem to think Parliament should reject it. I'm emotionally inclined to agree with the angry mobs. Honestly, I don't know what will happen to the Greek people if there is a disorderly default, but I'm pretty sure about what will happen if they do accept Auswitch austerity.
Greece will be totally fucked for many years.
Most important, it is not Greece that will be bailed out by the current plan — the plan provides for a bailout of European banks. The IMF, ECB, and European Commission will pay into an escrow fund for the new Greek bonds, which will pay the banks first. Should there happen to be anything left after the banks are sated, that remainder goes to the Greeks.
In the meanwhile, Greece is in the fifth year of what is being called a recession but really is a depression, and that depression continues to be made worse by austerity imposed from outside. The new measures require Greece to reduce its minimum wage by 22%, and all wages are likely to fall as a result. 20% of the government jobs that have driven the Greek economy in the past will be eliminated, elevating the current 20% unemployment rate. Nobody expects a drop in the prices of things like food, fuel, and rent.
Personally, I'd be inclined to go with the drachma. Greeks who still have savings in Euros, I'm sure, will get them out of the country. Those who have Euro denominated debt can default along with their country.
Screw the banks.
Showing posts with label drachma. Show all posts
Showing posts with label drachma. Show all posts
Friday, February 10, 2012
Friday, October 7, 2011
Απονομή, η ελληνική κυβέρνηση!
(That is supposed to say, "Hey, Greek government!" but I must admit it's Greek to me.)
Anyway, I thought you guys were supposed to be Socialists — so what's with the sucking up to the ECB, the private banks, and the IMF? Those are your people in the streets. Don't fuck them over.
There's an odd chance your rocky, sunwashed little country could bring down multinational capitalism by tipping over banks like a row of dominos. That would present a big problem for the rest of the world, but in Greece you'd hardly notice the difference. Everybody knows you're going to default, so why keep torturing the Greek people when you could start helping them now.
First, of course, you have to leave the Eurozone. Yes, we all know there never was an orderly way provided for a country to do that, so you'll have to improvise: start printing drachmas, and use them to pay your very numerous government employees. Pick any conversion rate to the Euro you like. Close your banks long enough to replace all their euros with drachmas. Pretty soon, what's left of your private sector will be paying its employees with drachmas too, because they'll be a lot cheaper than Euros; and those who sell goods and services will have to accept them because they'll be the only currency around. The idea, of course, is to end up with a devalued currency. The tourists will love it.
There will be, of course, a black market in currency — which will help to devalue the drachma even more. Inside Greece, though, prices will adjust to the new (old) money. Imports will be very expensive. Local producers will sell more of whatever they produce. Maybe you can find something other than tourism to sell abroad.
Gather together all the euros you can get your hands on — it doesn't matter how many. Set some aside so you'll have a little foreign reserve for when you really need imports, and explain to your creditors that all they'll be getting is what you have left to give them. Their haircut might take some scalp along, but you can just shrug in that charming Greek way you have, and go about your business.
Granted, nobody will give you credit for quite a few years but, at last, you'll learn to live within your means — and don't worry about the Germans invading again. They can't get blood from a stone.
Anyway, I thought you guys were supposed to be Socialists — so what's with the sucking up to the ECB, the private banks, and the IMF? Those are your people in the streets. Don't fuck them over.
There's an odd chance your rocky, sunwashed little country could bring down multinational capitalism by tipping over banks like a row of dominos. That would present a big problem for the rest of the world, but in Greece you'd hardly notice the difference. Everybody knows you're going to default, so why keep torturing the Greek people when you could start helping them now.
First, of course, you have to leave the Eurozone. Yes, we all know there never was an orderly way provided for a country to do that, so you'll have to improvise: start printing drachmas, and use them to pay your very numerous government employees. Pick any conversion rate to the Euro you like. Close your banks long enough to replace all their euros with drachmas. Pretty soon, what's left of your private sector will be paying its employees with drachmas too, because they'll be a lot cheaper than Euros; and those who sell goods and services will have to accept them because they'll be the only currency around. The idea, of course, is to end up with a devalued currency. The tourists will love it.
There will be, of course, a black market in currency — which will help to devalue the drachma even more. Inside Greece, though, prices will adjust to the new (old) money. Imports will be very expensive. Local producers will sell more of whatever they produce. Maybe you can find something other than tourism to sell abroad.
Gather together all the euros you can get your hands on — it doesn't matter how many. Set some aside so you'll have a little foreign reserve for when you really need imports, and explain to your creditors that all they'll be getting is what you have left to give them. Their haircut might take some scalp along, but you can just shrug in that charming Greek way you have, and go about your business.
Granted, nobody will give you credit for quite a few years but, at last, you'll learn to live within your means — and don't worry about the Germans invading again. They can't get blood from a stone.
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