Greeks Grab Their Money from the Banks – Time is Running Out

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While the European Union is dragging its legs regarding a sustainable solution for Greece, the Greeks are on the move, withdrawing large sums of money from the banks (before they won’t be able to), taking to the streets and begin talking about a revolution. 7 updates:

Greeks on the move

  1. Spanish style protests: Up to now, Greeks were occasionally going for a protest against austerity measures. In too many cases, it turned violent and ended quite quickly. Things are different now: inspired by the Spaniards, the Greeks have changed the style: since Sunday, May 22nd, they protest peacefully in front of the parliament building at Syntagma Square in Athens. They blame the government and the banks for corruption, and keep up the pressure. This is much more efficient. A general strike is planned for Saturday, June 4th.
  2. Talkin’ bout a revolution: German paper Bild reports (German) reports that some of the protesters are talking about a revolution: they don’t have hope in the current ruling party nor the opposition nor the European Union. A third of Greeks already support a revolution.
  3. Getting Ready for Default: Some aren’t just protesting but acting to protect themselves from a default: Greek banks hold a lot of government bonds. Greek citizens fear that the banks will freeze and begin getting cash: 1.5 billion euros were withdrawn in just two days. This accelerated with the protests.

And what did the leaders do over the weekend:

  1. Denial that Greek targets missed: A report in Germany said that the conclusion is clear: Greece missed its obligations. This comes as no surprise, but the officials kept on dragging their legs. This was of course denied quickly. For how long?
  2. No money for you: Jan Kees de Jager, the Dutch finance minister, made it very clear that Greece will get no money if it doesn’t fulfill its obligations. Trust in Greece is very low.
  3. Working on another bailout: The FT reports a new and severe program for Greece, including international intervention in tax collection and mass privatization of Greek assets is discussed. The ECB continues opposing any sort of Greek restructuring. EU finance ministers meet on June 20th.
  4. Sarkozi supports restructuring: The French president surprised and changed his attitude towards restructuring, saying that “bondholders should share the pain”. His finance minister, and leading candidate for the IMF, Christine Lagarde, rejects this very strongly.

How long will it take until this crisis will explode and send the Euro way down? June will be a very interesting month.

Further reading: Does the Arrest of DSK Prevent Greek Restructuring?

Let’s finish with a nice song: Talking About a Revolution by Tracy Chapman

Update December 7, 2011: Greek Bank Run Intensifies – Exacerbates Greece’s Misery

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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  • Gabrielle Phillips

    Greece the home of Democracy, should opt out of the pseudo democratic EU,(where it is government by the people, for the people who run the government)
    Instead they could instigate a totally new constitution based on the one in Athens in the fifth centuary B.C., and many other democracies in the following centuries, in the central meniterranian area Which only had their freedom terminated when an emerging superpower with virtually limitless mititary resourses invaded them piecemeal.
    I am asuming that everone who can read can have access to an internet connection.

    • Li

      I like the cactusland banking article for how it explains the mechanics of banking, but it also contains a dangerous economic (and philosophical) fallacy: money is not reducible to a store of value for human labour. It can certainly serve that function, but I can labour all I want at digging ditches and filling them in again and would and should not get any money to store away for that, and I can come up with a brilliant idea for creating free energy somehow and create a proof of concept in a week that I sell for a billion dollars. If money were a store of value for human labour, how does that make any sense? If one then says “well the latter person’s labour was just worth more”, that leads to a self justifying definition that just renders useless the whole concept anyway.
      Money is a medium of exchange. It does not measure value, but it does convey it. It is a commodity that fluctuates in exchange rates to other monies and other goods and services. People’s money renumeration for their labour\inventiveness\whatever is based on the same method of pricing other goods: willingness of others to pay that in that context, NOT some sort of inherent value calculation.

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  • Robert

    The crux of the issue is banking itself. The fact that banks can creat out of nothing enormous amounts of money to lend allows them to push these debts onto government, and in the end, tax payers. Modern banking is truly corrupt, it needs to end, here is a good article on how it all works, how banks make money out of thin air http://www.thecactusland.com/2011/05/moral-hazard-of-modern-banking-how.html

  • Bogart

    Well like it not the Greek Government is in default. And the awful Irish Government that bowed to the IMF demands has promoted a return to the financial mess that was Ireland prior to the 1990s.

    The only solution is to dissolve the ECB and the common currency. At some point, like now, the Germans, Dutch, French, etc are going to really tire of giving their wealth to other folks.

    But power hungry bureaucrats in the EU will not relinquish anything and instead will turn the healthier economies into basket cases.

    And the best part is that the Spain will have the EU by the balls as it is too big to fail.

    And if you are in the USA then just wait because the governments of California, Illinois, Michigan, New York, Rhode Island and Ohio are insolvent institutions. And when California gets bailed out the rest of these states will be there with their hands out and will have every incentive to explode their budgets and debt levels.

    • Bob

      It seems like the only way out, full scale worldwide defaults, from Greece to Japan, California to New York, everyone is approaching the collapse of the credit economy by defaulting like dominoes. It is the inevitable outcome of so many centrally planned economies becoming interdependent.

  • Gabe

    http://www.youtube.com/watch?v=Zo5JEl8GHU4

    Central banking is a important plank from the communist manifesto. Maybe the masses are finally realizing that central bank money printing does not solve our problems. Neither does big government, or anything else proposed by the elite.

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  • alan

    It will probably take a revolt in our nation as well. Big government don’t care about the people anymore and it is time for the people to take a stand.

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