On Feb. 16 a piece of news came out showing the accelerating decline of the Greek financial system as more and more people and businesses are conducting a new run on the banks. And perhaps what is most interesting is that the public no longer trusts the Syriza government, or the Troika, and are getting their money out of Dodge long before 'talks' get into high gear.
In fact, those who still have some modicum of wealth following the austerity and capital control measures imposed upon them three years ago by Prime Minister Tsipris, the IMF, and the ECB have remained attentive to what many in the U.S. and the rest of Europe failed to learn back in 2008, and that is that governments, central banks, and private banks are little more than the walking dead, and can no longer be trusted to be custodians of your money.
The grave disagreement between the International Monetary Fund and the European lenders, Grexit bombshells flying around and Greece’s reluctance to accept additional austerity measures have increase uncertainty among citizens – for one more time.
And so, as KeepTalkingGreece.com notes, what do citizens do when they feel political and economical insecurity? The run to banks and withdraw deposits.
2.5 billion euros left Greek banks in the last 45 days.
And this despite the capital controls that allow Greeks to withdraw a maximum of just 1,800 euro per month.
However, in better situation are those who brought back cash to the banks. Cash that was largely withdrawn before the capital controls were imposed in July 2015 as a result of a major bank run from November 2014 until end of June 2015. Those who pulled the cash from under the mattress and brought it to bank are allowed to withdraw money above the 1800-euro cap.
According to newspaper Eidiseis, the cash withdrawal in the last 45 days has set bankers in alert.
In addition to cash withdrawals, business loans and mortgage, amounting a total of 500 million euros, turned red. A sign that the delay in the conclusion of the second review has increased uncertainty among the Greeks, as the daily notes.
Unfortunately for Greece, they appear not to be in a position to stand up to the EU and the Troika because of who remains at the head of their leadership. In fact, it was Tsipris's cowardice, or perhaps something more nefarious such as being a bought and paid from tool of the EC, that led the government's Finance Minister to quit at the end of 2013's negotiations and allow the Prime Minister to sell off the country for a few tranches of bailout cash.
No Greece is lost unless a combination of two things happen, and if these were to be enacted it would become a blueprint for all insolvent European nations to follow to save what is left of their monetary systems.
Grexit and resignation.
Without getting someone who is morally against the EU and against the Euro, Greece will not have the stomach to follow in Britain's footsteps and initiate a Greek Exit. And ironically, and despite the fact they refused aid from Russia three years ago if they chose to bail on the Euro currency, aid from another quarter could come by way of the United States, and from their new President who could see the Southern European nation ripe for an infusion of dollar based capital investment.
Even if Greece chooses not to leave the European Union, they could still climb out of their bind by ditching the Euro and printing a sovereign currency in which they could inflate and use to pay off their outstanding debt.
And that, or a combination of a sovereign currency and Exit, are the keys for nations such as France and Italy to end their near decade's long depression and austerity that has crippled much of their economies.
Many Eurozone nations have found themselves deep in public sector debt following the consequences of the Great Recession and the European debt crisis of the early 2010s, which is one on the reasons behind current rising political populism in several rather prosperous economies.
Exiting the euro and bringing back the (devalued) national currencies might help pay off debts, some populist leaders argue, while also spurring inflation and brightening growth prospects.
Either way, a repeat of what took place for Greece in 2013, or for nations like Spain, Portugal, and Italy since the 2008 Credit Crisis will occur if governments think they can negotiate with Brussels and expect a different outcome. Because if there is one thing that has been proven to be true over the past year, it is that when Britain told the EC to F Off back in June, they ended up becoming the best growth economy in the G20 for 2016.