The Greeks voted a resounding NO to more austerity measure yesterday in return for more money from the EuroZone and the IMF. Things are not going to go well for the Greece. And they’re just a snapshot of what’s coming.
Greece is the poster child for socialism. You can retire at full pension in your 50s, like a firefighter or cop in many cities in the US. They have an extensive social service network to take care of their people, think “safety net.”
The problem, as an author discovered when he moved to Greece to find out what the country was like, is that people will do what you pay them for.
It was the rumours of an ‘island of the blind’ which first bought Angelos, a journalist, to Greece in 2011.
He had heard that on Zakynthos, something like two per cent of the population were registered blind.
All was not quite how it seemed, however, and it transpired that 61 of the 680 ‘blind’ residents were quite happily driving around the island.
In fact, an astonishing 498 of those 680 were not blind at all – or even partially sighted.
You may be scratching your head, but remember the “safety net.”
But being ‘blind’ had its advantages – in particular, the €724 paid in benefits once every two months, and a reduction in utility bills.
It was a scam which could be traced back to one ophthalmologist and one official, which was estimated to have cost the country €9 million.
That wasn’t even the tip of the iceberg. The whole story is worth reading, but here’s another sample.
When the government chose to take a closer look at who they were paying pensions to, they found a slightly suspicious 8,500 pensioners had surpassed the milestone age of 100.
An even closer look revealed, 40,000 pension claims were fraudulent. It seems people were forgetting to register their loved ones’ deaths.
Virtually everything in Greece that will get someone a nickle from the government is drenched in fraud. (And for an example here, Google “Medicare fraud.”)
That noise heard by the Greeks this morning was a rooster crowing. As Margaret Thatcher noted about socialism, pretty soon you run out of other peoples’ money and the Greeks ran out yesterday. Unfortunately, they won’t be able to eat the chickens coming home to roost, those chickens may be eating them.
Banks have been closed for a week and they’ll likely be closed all this week at a minimum. Forget withdrawing your deposits. No wire transfers. Here’s what a Greek bank looks like today.
We expect to see the government laying claim to all bank deposits by the end of the month.
Greece will likely leave the EuroZone and start printing Drachmas. They should start will one-billion Drachma notes and peg those to the Peso. There is a very high price to pay for running out of other peoples’ money, and the Greeks are about to demonstrate the price.
A bigger problem for the EuroZone is that if Greece walks away from their debts and pulls out of the Euro, the only question is, “who’s next?” Italy, Portugal, and Spain all have teetering socialist economies and France isn’t far behind.