Wednesday, July 29, 2015

Greece -- what now

Will they or wont they?

One thing is clear the process is far from being over, aside from that absence of debt forgiveness -- only extension of maturity they ECB seems to be kicking the ball down the lane even further.  However, Greece has just discovered the limits to its sovereignty, when the President announced the re-opening of the country's stock market to be told by the ECB, that non, Monday was not a good day after all!  The limits of sovereignty explored by the people (and government) of Greece.

So what now, well barter is back in a big way!  People no longer having access to the government's payment system (e.g. Euros) are resorting to plain and simple barter.  That usually increases transaction costs, removes the power of taxation -- no "stinkin" 20% VAT, and inefficiency.  On the other hand it allows people to eat, so that's something right.

The breakdown of government has to be near, clearly the efforts to get all the ECB inspired legislation is hitting massive roadblocks, and its only going to get worse.  However, for the people they will realise that they can do without basic services -- at least until the electricity grid shuts down. The issue is serious, the players are now seeing the effects of Europe's crazy solution.  Because of capital controls the economy is in meltdown, lots of companies are shutting down because they no longer have access to goods from abroad (i.e. outside of Greece), that means unemployment is about to rise, and capital owners are about to see their wealth drop precipitously.

It is increasingly hard to see how a happy (in eurozone) outcome can be generated.  In fact, the pressures on ordinary greeks (and their government) may prove to be too much, election are certain to beckon before the end of the summer, who will replace the current government, will they be more trustworthy?

No closer to an endgame, the game has become painful

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