Having not long come back from visiting one of the Greek Islands I declare my hand as a fan of Greece, or at least its Islands. It pains me to see the problems its going through but you can’t help but wonder at the ‘spare the rod, spare the child’ attitude
of the EU. In their haste to broaden the club, they rushed through the Greek application without so much as one serious economic hurdle. Where are the heads of state and their senior economic advisers who oversaw this debacle, where are the audit reports?
What clown decided that harnessing Greece’s economy to the German model would be a good thing all round? Through association the Greek economy would heal itself; tax avoidance and corruption would disappear and all would be well. I wish I could recall the
rhetoric of ministers at the time, it must make for embarrassing playback.
Greece is effectively bankrupt, it can’t repay the interest on its loans let alone the debt, so how far down this road do we have to travel before the bank manager says, enough is enough. Much as the high interest days of the Thai Bart and Irish Punt, banks
must be monitoring their risk metrics very closely indeed to anything Greek. How many banks already want to see payments received before releasing their leg of a transaction, how many banks are already throttling back limits to minimum levels for Greek counterparty’s?
I last wrote on this subject on the 17th June and two subsequent EUR 100m loans have not even touched the sides, anyone familiar with the film the Money Pit will recognise the problem. Greece must leave the club and bring back a national currency, maybe
the drachma, perhaps a euro drachma of some form. This won’t be a panacea for all ills but will allow the Greeks to begin to address their problems.