An unusual post today. Peter Carayiannis, whose Toronto firm Mitch Kowalski and Doug Jasinski have blogged about, is currently in Northern Greece, where he is a first hand observer at a momentous stage in modern Greek history.
He has been sending selected friends his notes on what he is seeing – and how it feels to be on Greek streets, as the population faces Sunday’s referendum on whether to accept the conditions of further economic aid, or go it alone, and exit the Euro.
Here is what he’s been seeing:
Greece – With Its Toes Over a Cliff
Dispatches from Greece (June 29, 2015)
(I have been following the Greek situation with interest since 2009 and have travelled here several times over the past 5 years. Coincidentally, I landed in Athens on June 28th for summer holidays, just in time for the announcement of the closure of the banks. What follows are my thoughts and reactions to what I am witnessing. In time, history will render its verdict as to what has happened here. I am trying to capture the mood of the moment.)
It’s June 29 and I am writing this from a hotel in the Peloponnese. My family landed in Athens on the 28th, and the first thing I saw at the airport was a line up down the hallway on the Arrivals level. The line-up was for the sole ATM because the government had announced, in the wake of the collapsed negotiations, that the banks would be closed on Monday morning. Leaving Toronto we knew this would be an interesting time to be in Greece thanks to the announcement of the July 5 referendum. The banks are closed? Very interesting indeed
Tonight, along with the rest of Greece, we watched a live interview with Prime Minister Tsipras on national TV. PM Tsipras is clearly playing a dangerous, high-stakes games, invoking FDR rhetorical flourishes, telling Greeks they have nothing to fear but fear itself. Well, there is a long history of Athenian politicians, stretching back to Ancient times, relying on rhetoric. This time the Greeks need something more concrete.
PM Tsipras is backed into a corner. A corner largely thanks to the actions of the Greek kleptocratic oligarchy in power for the past 40 years and partly as a result of his inability to follow through on his electoral promises of only a few months. But in saying this, let us not forget the role of the European creditors, as well as the IMF, the EU and the ECB – the Troika – in creating the underlying circumstances that have lead to today.
In relying on rhetoric, PM Tsipras is no longer speaking to Europe. His message is aimed straight at the Greeks, his constituency, his voters and his people. And in speaking to the Greeks, he is doing the right thing. The time for theGreeks to continue as supplicants to their creditors is past. Europe might not like to hear this message, but the time has come for an adult conversation, including on the part of the Troika.
The Troika’s economic conditions have lead to an economic depression unseen since the US Great Depression of the 1930’s and all of this was avoidable. The past 5 years of austerity have seen the Greeks suffer a crushing economic blow. Unemployment hovers around 28% and youth unemployment is over 50%.
In the past 24 hours I have conducted an unscientific survey of the average Greek on the street – at the airport, in the hotel, at the gas station, at the coffee shop. While unscientific, these people have been living this reality (while those of us out of the country have been reading about it) and the view is pessimism, resignation and humiliation.
Humiliated at the position in which they have been placed by the Europeans and several different stripes of Greek political leadership.
Resigned after 5 years of crushing economic austerity measures that have strangled the Greek economy and has lead to this situation.
Pessimistic because after 5 years, this “crisis” has not been resolved. The situation is chronic, ongoing, persistent and critical.
There will be a referendum on Sunday, July 5.
What is the question, specifically? How will this referendum be organized in a week?
Non-Greeks might not know that it is mandatory, by law, for all voting aged citizens to vote in elections. You vote where you are registered, which is typically your home-town, and not where you live. Next Saturday all of Greece will be on the road driving to their home-towns to vote on Sunday. The country will stop
Will there be a debate this week? Ex-PM Samaras challenged PM Tsipras to a debate.On tv tonight he accepted the challenge. Will it actually happen?
A NO vote and then what? Do the banks stay closed? A NEW Drachma? We need a lot more detail on this.
I hope to be able to continue with daily updates, especially with a focus on local reactions.
Postcards From Greece – A Nation Lurches While Europe Watches
Quick! How much cash do you have in your pocket right now?
What would do if all the banks in your country suddenly closed on a Sunday and you were forbidden, by law, from removing more than $60/day from the bank? How would you feed your family? Buy gas? Pay the electricity bill? What would you do?
Ask a Greek. All Greeks are living this nightmare right now.
In a move that caught most off-guard, PM Tsipras of Greece ended negotiations with Europe (or was forced to end them because of European demands, depending on who you believe) and called a referendum to be held on Sunday, July 5th.
In the meantime, the banks have closed and capital controls are in place. Greek account holders are limited to withdrawing €60 per day and the banks will stay closed until “after the referendum” although the precise day on which the banks will open is a mystery.
I’ve been following the ongoing EU-Greece debacle from Canada for the past 5 years, including multiple visits to Greece during the same time. Today I am writing from Greece because we started day 1 of our summer holidays on the day the Greek economy ground to a halt.
Politicians will talk of politics. Economists will talk of the economy. Historians are busy writing their first draft.
Here’s what I learned today:
Cash – every bank machine on every street corner had a line up of a dozen or more people. Every. Single. One. Some had line-ups around the block. When was the last time you saw 5 people in front of a bank machine?
Gasoline – I drove 300kms today. The roads were empty. Half the gas stations were closed. It was Monday between 2 pm and 5 pm. Under normal circumstances, the roads would have been busy and every gas station in the country would have been open. How much gas is in your tank right now? How far could you drive if you had to leave town?
Out of the country? Uh oh. A Greek in Austria called in to a tv talk show to say his Greek bank card was refused in an Austrian bank. How will he get home?
Are you on a pension? Pensions are paid by direct deposit. Seniors and people on fixed incomes have no choice but to use the banking system. Where will they get cash? How will they buy their medicines?
And yet, the situation somehow was not as dire as it might sound. There was no panic. Fear of the unknown, perhaps yes, but no fear of the Europeans.
We stopped to eat along the way and made small talk with locals. They are dealing with the punishing morally judgemental Europeans and the seemingly inept Greek political leadership with a grace and courage we should admire and respect. They have been beaten and humiliated by Europe for years. Their character and institutions the subject of scorn and derision. And yet, they remain a stoically proud people with the inner strength to persevere.
Pericles of Ancient Athens might not recognize the political leaders today, but he would recognize the average Greek.
The Greeks Need A Clarity Act
In 1995 Quebec held a referendum to secede from Canada. The Federal government passed the Clarity Act, requiring that the question be clearly articulated.
It seems as though the Greeks need Ex PM Chretien (note: he’s probably available for consulting, but not sure how good his Greek might be).
Here is the referendum question.
(credit to the BBC, in an article that also references the Canadian Clarity Act – here: https://medium.com/p/b06455ecc9e9 )
For those who can’t read Greek, here’s a translation.
So, in less than a week, the cities of Greece will empty as all registered voters leave for their hometowns. They will assemble in the plazas and townsquares and coffee shops and they will decide yes or no as to whether or not to accept a plan, or a proposal, in its two parts, being one unified whole.
Presumably if ‘yes’, that means do whatever the Troika say and continue down the current path.
If, however, ‘no’, what does that mean? No to the proposal and to the Euro? No to the proposal and to Europe? Or just no to the proposal but yes to Europe, but maybe no the Euro if the finances aren’t in order.
The fog of referendums is upon us.
Postcard from Greece – The Frontline of the Austerity Wars
As I write this, it’s a few minutes after 1 am. Greece has formally, legally, officially, definitively defaulted on its loans. The stormclouds that were on the horizon are now upon the Greeks.
What follows are some observations and thoughts on the situation as it currently stands.
A Moving Target
To say that the situation is fluid is an understatement. To question whether anyone is in control is perhaps more a propos. Five years on and we have reached this impasse – a point where the Greeks can offer no more (and it’s not enough) and the Europeans will accept no less (and it’s too much) – and somehow people are acting surprised. It is a shocking state of affairs and an indictment of all sides that after 5 years of dominating the European agenda that the Greeks and the European “Union” (to the extent that this organization, that is bleeding a member state dry, can be called a union at all).
A few days ago banks were closed capital controls were put in place allowing account holders to take out 60 euros/day. Unless you’re a pensioner, in which case you can take out 120 euros/week. And that assumes that your ATM has cash. Or, that your cash machine has 20’s. There are broad reports that the machines have run out of 20’s and are dispensing 50’s only (no 10’s), resulting in a de facto reduction of the capital controls by 15%. Greeks are lining up at bank machines for an hour a day. The situation on the street is not good.
End of Ideology
If there is to be a workable solution, there must be some kind of business-minded approach. I am not talking about a capitalist’s solution. I am talking about a common-sense weighing of the pros and cons and then a final decision, with a clear direction forward. In private affairs, if Greece were you or me, we would declare bankruptcy, our creditors would have to declare a loss, our credit would be wiped out, and we would all move on.
For Northern Europeans to continue to stand in moral judgement over the Greeks must end. We can accept it as a given that this country is not as productive as others, that the political leadership has been weak and self-serving for decades and that the entire country has had what can be most charitably described as a casual and passing relationship to the payment and collection of taxes. Fine. This was also the case when Greece joined the European Union in 80’s, and at every point up to, and including, the moment the Greeks joined the Euro currency. Nothing changed. And this was the case when the European bankers were making money hand over fist lending to Greece and when Mercedes-Benz, BMW and VW enjoyed sending shipment after shipment of cars, paid in full. This was also the case during the events giving rise to allegations of bribery of Greek officials by Siemens’ employees.
But none of this helps to solve the problem.
Let’s remember that a loan is a contract. A legally enforceable obligation to advance funds matched by a legally enforceable obligation to repay the funds, all on terms. Failure to repay the funds is a breach of contract. It is not grounds to pulverize a nation, as an example to others. It is not grounds to humiliate and denigrate an entire society. But even if it was sufficient grounds to brand the country with a Scarlet Letter, that point has been well made.
It is now time to find a real solution to a real problem.
The View From The Street
Admittedly, the following is an entirely unscientific but here are my impressions. I am on holidays in Southern Greece, in a small family owned hotel near Gytheio. The hotel is empty. There are maybe 5 families here. We have stayed here 3 times before, and the hotel has always been full. Tonight we went to the nearest town to run some errands and for dinner. The streets were empty. I spoke with shopkeepers and restauranteurs. They told me there was a brisk trade on the weekend until the Sunday announcement. With the closure of the banks, commerce is grinding to a halt. Not surprising in the abstract but alarming to see in person.
Was there a consensus view? There is no consensus on the way out of the Labyrinth and, continuing with the analogy, no consensus on whether the Minotaur is the Troika or Tsipras. This latter point seems to have radically split the people. However, where there is unanimity is:
1. the ongoing situation must be resolved once and for all; and
2. ideally within Europe,
as leaving the EU and the euro is perceived as going from the frying pan to the fire.
By now, the main actors are well known. Tsipras, Merkel, Varoufakis, the Troika, Lagarde, etc…
I would like to introduce you to an unbelievably toxic, angry, aggressive, immature, petulant bully. Her name is Zoe Konstantopoulou. She is the youngest ever President of the Greek Parliament. She needs to be replaced. Today she went on Greek tv and for 38 minutes refused to answer a single question, or provide any information whatsoever and chose, instead, to spend her national tv time berating and insulting journalists, the tv station and the journalist doing the interview.
Madame President’s interview should stand as the low point of this government. She is an embarrassment to herself and to her office. There is a critical referendum scheduled in a few days. She has. moral obligation to assist the people in forming their decisions. Shame on her.
Tomorrow is another day.
Postcards from Greece – What if you called a referendum, and people couldn’t vote?
Now that the drama of Greece going into default is behind us, people are shifting their thoughts to the referendum on Sunday.
Without speaking to predictions and polls, I want to discuss the logistics of the actual vote.
Where do Greeks vote?
The answer to this question is not as obvious as you might think.
A quick refresher on some basic facts, drawn roughly. Greece has a population of approx. 11 million. 5 million live in Athens. 1 million live in Thessaloniki and the rest of the country lives in rural towns and villages with populations ranging from a few dozen retirees living a quiet pastoral life in their ancestral village, like a picture postcard clinging to the side of a mountain, to small bustling town of few tens of thousands of inhabitants. In short, the country is half urban and half rural. But for electoral purposes, this is a rural country.
The idea of the ancestral “village” is front and center in the imagination of Greeks. On major holidays, people don’t simply go home to their folks, they go back to the village. The entire extended family returns to that place they all think of as home.
Christmas. Easter. Summer vacations. In the village. Home, where their hearts are. Spend time with any Greek and eventually they will lean in conspiratorially and tell you how the sun shines brighter on their village, the water tastes better and the skies are bluer.
All of this is to say that Greeks vote where they are registered to vote and Greeks prefer to register, not where they live, but where they come from. Greeks are registered to vote in their home village and home town.
This means that Athens and Thessaloniki will empty out on Saturday afternoon as half the country “goes home” to vote. This happens for all elections but the process is orderly. This week will be anything but orderly.
Today we are seeing the first reports that some of us have been talking about for days. How will the Greek government organize a referendum in 7 days.
Ballots? How will the official ballots be printed in time? How will they be circulated to the thousands and thousands of villages around the country? What about the remote islands?
Today there are reports that the Government does not have enough of the official legal paper to make the ballots.
This opens the door for significant voting problems and, in the worst case, fraud.
By law all Greeks of voting age must vote. Compulsory voting (not a bad idea when you look at declining voter turnouts in other Western democracies such as Canada.)
Millions of Greeks need to move around the country this weekend.
Cash? Do they have enough cash to travel.
Gas? Do they have enough gas in their cars to make the trip? Reports from around the country confirm gas stations are not all open and those that are open are only accepting cash.
Question: If your bank was closed, with capital controls in place, you have a $100 in your pocket and half a tank of gas in the car, would YOU pack your family in the car for a 400km roundtrip in the mountains?
Is the referendum even Constitutional?
To add more murkiness to the situation.
Some are arguing, like the Athens Bar Association that the referendum is unconstitutional.
This remains an open question.
At this point, everything is more questions than answers as the days’ events continue to unfold, or perhaps unravel.