Outside information on the Greek financial crisis

Definitely off topic, but I wrote the following to a an international banker friend of 50+ years experience about the Greek financial crisis

“But of more immediate import, what sayeth the banker about shutting the banks in Greece for a week. In this article http://www.theguardian.com/business/live/2015/jun/28/greek-crisis-ecb-emergency-liquidity-referendum-bailout-live#block-55907903e4b024248ae9a5ed people were taking Euros out, but if the banks don’t have any and the Europeans won’t give more, what happens then. Gotterdammerung?”

I got the following back

Possibly. Martial law? It happened here in the 30s – the “bank holiday(s)”. Having lived thru 2 bank runs, I can tell you it is a time when rationality is absent. The presumption is the Greek authorities have been planning for this. Greeks are used to violent demonstrations,. I would expect some bank buildings being burned. For a few days the country can function. More and I can not see anything but Grexit. I see a gigantic game of chicken. The Germans have been blinking up until now but the internal political cost to Merkel may be too great. Germany has MUCH to lose if Greece leaves the EU.

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Comments

  • PP  On June 29, 2015 at 11:30 am

    Portuguese Reader here. We are following much of this crysis with great concern and I think that Germany and the rest will capitulate at the end to avoid grexit. Nevertheless, though times for Europe, that is for sure.

  • luysii  On June 29, 2015 at 11:57 am

    What the banker also worries about, is whether this will spread to Spain and Portugal. He advised watching what happens to Spanish and Portuguese bond interest rates this week. A rise in rates would not be good for them and is a manifestation of fear of a more general problem.

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