{"id":414,"date":"2011-08-02T10:00:00","date_gmt":"2011-08-02T10:00:00","guid":{"rendered":"https:\/\/blog.alexanderhiggins.com\/?p=414"},"modified":"2024-04-24T13:57:06","modified_gmt":"2024-04-24T13:57:06","slug":"greece-panic-masses-race-pull-cash-banks-causing-great-depression-style-bankrun-48201","status":"publish","type":"post","link":"https:\/\/blog.alexanderhiggins.com\/economy\/greece-panic-masses-race-pull-cash-banks-causing-great-depression-style-bankrun-48201\/","title":{"rendered":"Greece In Panic: Masses Race To Pull Cash From Banks Causing A Great Depression Style Bank-Run"},"content":{"rendered":"
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The Guardian reports that while Western media has been silent on the issue Greece is in an absolute state of panic facing a Great Depression style run on the banks as people race to withdrawal their cash.<\/h3>\n

The growing economic crisis in Greece has entered the cusp of a complete financial collapse which for the most part being ignored by the Western media.<\/p>\n

Regardless of why Greece is was not on the radar it should be because the situation is dire.<\/p>\n

\"CNBC's<\/a><\/p>\n

CNBC\u2019s Cabrera reports Greece safety deposit boxes sold out due to run on Greek banks<\/p>\n<\/div>\n

As the Guardian article below informs us the dreaded bank-run has arrived despite politicians selling out the live hoods and futures of the people of Greece in exchange for a second banker bailout loan to pay back the interest on the first banker bailout loan.<\/p>\n

Economists and world leaders told the Greek politicians that they needed to force harsh Austerity measures on their citizens to prevent this exact situation from occurring.<\/p>\n

Needless to say, even after subjecting to the will of the International banking cartel, Greece is now in an absolute state of panic as people rush to save their cash and live savings.<\/p>\n

Western media could just be keeping the issue under wraps for the time being to buy the Wall Street enough time to pull their money out of the banks and move it into gold.<\/p>\n

That could explain why the markets crashed today and gold shot through the roof.<\/p>\n

Of course, the only thing the masses were told about the situation in Europe is that there are renewed debt fears in Europe.<\/p>\n

Meanwhile Wall Street is fully aware that the masses are pulling their cash out of the banks.<\/p>\n\n

\u00a0<\/p>\n

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Greece in panic as it faces change of Homeric proportions<\/h1>\n

Fear is driving a silent bank run in Greece \u2013 but some see the government\u2019s austerity plans as a chance to transform<\/h3>\n

\u00a0<\/p>\n

\"Taxi<\/p>\n

Taxi drivers run from teargas during clashes on the island of Crete, Greece. Photograph \u2014 Image Photo Services \u2013 AP<\/p>\n<\/div>\n

In one of the biggest banks in the centre of Athens a clerk is explaining how his savers have been thronging to pull out their cash.<\/p>\n

Wary of giving his name, he glances around the marble-floored, wood-panelled foyer before pulling out a slim A4-sized folder. It is about the size of a small safety-deposit box \u2013 and those, ever since the financial crisis hit Greece<\/a> 18 months ago, have become the most sought-after financial products in the country. Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults.<\/p>\n

The boxes are so popular that the bank has doubled the rent on them in the past year \u2013 and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: \u201cI\u2019ve been working in a bank for 31 years, and I\u2019ve never seen a panic like this.\u201d<\/p>\n

Official figures back him up. In May alone, almost \u20ac5bn (\u00a34.4bn) was pulled out of Greek deposits, as part of what analysts describe as a \u201csilent bank run\u201d. This version is also disorderly and jittery, just not as obvious. Customers do not form long queues outside branches, they simply squirrel out as much as they can. Some of that money will have been used to pay debts or supplement incomes, of course, but bankers put the sheer volume of withdrawals down to a general fear about the outlook for Greece, one that runs all the way from the humble rainy-day saver to the really big money.<\/p>\n

\u2018Clueless\u2019 government<\/strong><\/p>\n

\u201cEvery time the markets move, I get phone calls,\u201d says an Athens-based fund manager. \u201cThey\u2019re from investors asking: \u2018How can I get my money out of the country?\u2019 \u201d<\/p>\n

One senior investment banker is more blunt: \u201cPeople are scared that the government doesn\u2019t know what the fuck it\u2019s doing.\u201d He tells a story about an acquaintance who took out \u20ac30,000, wrapped it in a bag and stashed it in his garage. \u201cThe bag had previously had some food inside,\u201d he says. \u201cSo it attracted rats, who ate the notes.\u201d<\/p>\n

Bags of money in garages, frightened savers fleeing banks and even the country: these aren\u2019t the sort of stories you associate with a comparatively-prosperous European country, but with a developing one facing a life-or-death economic crash. The fact that they are now emerging from Greece not only indicates the scale of financial distress, it suggests something else: Greece today looks like parts of Latin America in the worst moments of its financial crisis.<\/p>\n

In an echo of the days of Jim Callaghan, the International Monetary Fund is back in Europe<\/a>, doing what it is more accustomed to doing in Buenos Aires or Brasilia: making emergency loans and telling the government how to run its economy. What is more, the scale of the changes an overborrowed Athens is now making are so vast and so rapid that they will leave Greece looking like a different country.<\/p>\n

The government itself describes its plan to slash public spending and jack up taxes as one of the most ambitious deficit-reduction programmes in the world. But what often goes missing from this discussion of a fiscal crash-landing is the impact on the lives of citizens who have precious little time to adjust. When salaries of civil servants are slashed by up to 30% within a few months, as happened last year, and over 20% of public-sector workers face unemployment within the next four years \u2013 plus whole swathes of national assets are to be privatised before Christmas, with more job losses doubtless to follow \u2013 then you are talking about a wholesale transformation of a workforce.<\/p>\n

Greece is already one of the poorest and most unequal societies in Europe, reckons Christos Papatheodorou at the Democritus University of Thrace. Among the few countries that look worse are Romania, Bulgaria and Latvia. So what will Greek society look like after the government\u2019s austerity measures take effect? He pauses, then says: \u201cIt will probably look like a developing country.\u201d<\/p>\n

That message has not been lost on workers either: one of the new nouns used by trade union members and others who oppose the cuts is kinezopeisi<\/em>, or China-isation. The claim is that such large drops in wages will lead to a workforce paid barely more than their counterparts in Shenzhen.<\/p>\n

The oddest thing of all is that some of the leading lights in the government appear to see nothing wrong in a wholesale transformation of Greek society, albeit not into one that resembles an enterprise zone in eastern China. Elena Panaritis is widely tipped as one of the up and comers in Greece\u2019s government, and it is not hard to see why: smart, formidably well-trained in economics after a career with the World Bank, funny and fluent in English, she is exactly the sort of person any prime minister would choose to give a keynote address to fretful institutional investors.<\/p>\n

And for a Greek politician involved in pushing through some of the most abruptly painful economic measures in the country\u2019s history, she does not seem especially Greek. When I observe how many Apple computers are in her office, she replies: \u201cThat\u2019s because I\u2019m not Greek, I\u2019m American.\u201d Her speech is American-accented and peppered with \u201cdarn\u201d and \u201chave a nice day\u201d. When asked to describe how Greece needs to change its economy, her answer revolves around changing its institutions and its structures \u2013 in other words, making Greece less Greek. Castigating the bureaucracy, she says: \u201cIt\u2019s not a kibbutz, it\u2019s a big country!\u201d<\/p>\n

This is a line that you hear often enough from those who want Greece to change. By European standards, Greece has an average-sized public sector, but a very leaky tax collection system. What the public sector is, however, is under-resourced and inefficient. On my last day in the country, I wangle my way inside a public pensions office for those working in the tourism industry: there are just two Dell computers in one large room, and lever-arch files dating back 30 years. No one ever paid for the data to be computerised, I am told, and the result is that one day\u2019s work takes three.<\/p>\n

Private sector woes<\/strong><\/p>\n

The other big problem is in the private sector, with few industries that are able to pay their way in the world. Jason Manolopolous, who is author of a new book called Greece\u2019s \u2018Odious\u2019 Debt, says that for years Greece was buying more from the rest of the world than it was selling. \u201cWe were buying BMWs from the Germans and selling them tomatoes.\u201d<\/p>\n

For now, those days are well and truly over. In Athens\u2019 upmarket shopping district of Kolonaki, boutiques that used to have waiting lists for designer handbags have shut. One sign says the owners have relocated \u2013 to Rome. In one clothes shop, with racks of discounted Calvin Klein and DKNY, the manager, Sav, explains what\u2019s happened: \u201cIn this crisis, the middle classes have been hollowed out.\u201d That is just what happened in Buenos Aires during its crash last decade.<\/p>\n

The result is that people who thought themselves used to one way of life, and in one social class, are getting used to a sharp downgrade.<\/p>\n

In one factory, where a staff of 200 is now down to 30, the manager points to empty floors and idle machines. They\u2019re now all on unemployment benefit, he says. \u201cMind you, our pay has been cut too, so we\u2019re not that far off.\u201d<\/p>\n

Outside the soup kitchen of the Aghia Triada church in Piraeus, near Athens, more of Greece\u2019s new poor are waiting for a handout. Anna and her two daughters have walked in the midday sun to get here and are now queueing up with the long-term homeless.<\/p>\n

That is not Anna\u2019s situation though; she lost her job three years ago but has still hung on to her house. That said, she no longer has the income or the benefits to pay bills and the electricity was cut off last month.<\/p>\n

Inside, Pater Daniel, the head priest, says that he\u2019s noticed a lot more \u201cwell-dressed, clean\u201d people taking free meals from the church. He reels off stories of a 23-year-old man who left last week for Australia, and a 40-year-old woman who lost her job on Friday.<\/p>\n

Because the Greek Orthodox church is partly on the state payroll, the clergyman\u2019s salary has fallen by almost 10% to \u20ac15,000 a year.<\/p>\n

Is he saying that the Orthodox church is also subject to public spending cuts? Pater Daniel laughs, then holds up five fingers: there are five priests in Piraeus, and soon there will only be one. He\u2019s pondering taking a second job.<\/p>\n

\u201cThere is too much pain, and people are looking for someone to listen and squeeze their hand.\u201d He sighs. \u201cEveryday I leave this church with a headache.\u201d<\/p>\n

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The content is published here under license between Alexander Higgins and The Guardian. The Re-use of this content is permitted providing that you comply with the The Open Platform Terms and Conditions<\/a>. In short you must register for an Open Platform API key and keep all content, including this notice, unmodified and fully intact.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Guardian reports that while Western media has been silent on the issue Greece is in an absolute state of panic facing a Great Depression style run on the banks as people race to withdrawal their cash. The growing economic crisis in Greece has entered the cusp of a complete financial collapse which for the … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/posts\/414"}],"collection":[{"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/comments?post=414"}],"version-history":[{"count":2,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/posts\/414\/revisions"}],"predecessor-version":[{"id":1135,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/posts\/414\/revisions\/1135"}],"wp:attachment":[{"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/media?parent=414"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/categories?post=414"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.alexanderhiggins.com\/wp-json\/wp\/v2\/tags?post=414"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}