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Thursday 22 September 2011

Greeks Will Default On Debt

At least that's the sentiment of the Greeks I talked to for a week .... they all consider it a certainty that Greece will default on its debts. Everyone I spoke to said that Greece would never pay back its debt. That it couldn't ever keep up the debt repayments for even a few years, let alone the decades required to cure the underlying problems, and that lending it more and more money was 'stupid' but 'German' because it just made the debt worse, not better.

In fact the consensus was that as soon as the Greek government had drawn the next tranche of EU/IMF funds, the price paid to get this money would prove to be too great, and Greece would default sometime over the coming winter, but before the next tourist season, so that they can devalue and get their competitive edge back. Most of them wished that their government would just do it now, instead of taking them to the edge of a civil breakdown (and possibly a left right civil war), by stretching the country to breaking point, but then defaulting anyway.

There was even a rumour that the UK mint (or other, secret, Greek printers) are printing a supply of Drachmas in secret .... which just goes to show how far things have gone. I managed to avoid all the strikes and travel disruptions travelling there and back, but I was told that the disruptions would get a lot worse over the coming winter. Many Greeks have been thrown into poverty, not so much in the resorts where the holiday trade underpins the economy, but in the bloated public sectors, which are the mainstay of Greek employment these days. It was noticeable that it was mostly British workers in many of the bars in the resorts, when 15 - 20 years ago it was mostly Greek workers, with just a few Brits employed.

The Drachma - Many Greeks expect this to return.

We could  be seeing this currency return to our holiday wallets next year ..... wouldn't that signal a big reverse in the European federal dream?

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