Thursday, June 14, 2012

Greek elections and capital flight

Greece is bleeding out in advance of Sunday's elections, and is in danger of dying on the operating table. And it is the Greeks who are making this happen, not the EU or the international community. News reports are that Greeks have been withdrawing an average of 800 million euros per day from the country's banks. Greek companies are doing the same. An attempt to make Greeks pay tax or have their power shut off has failed, money to pay for electricity production is running out, and Greek companies can no longer get lines of credit that are vital to the import-export business, or insurance to cover imports. The result is that imported items are disappearing from the shelves.

There is now nothing the EU or the international community can do but wait for Sunday's election results. The current behaviour of the Greeks does not yet support the idea that another infusion will be productive. Greek voters may want to stay in the euro for reasons of national pride, but membership in this euro zone, with its globally peculiar emphasis on orthodoxy and restraint, comes with responsibilities that they will either articulate a willingness to accept on Sunday.

Or not.

No comments:

Post a Comment