Greece please

Russell Short of the John Adams Institute in Amsterdam took an on the ground tour of Greece and published his observations of the effect of its three years of economic grief on the people.  This is real reporting, in the face of those faceless economists and EU policy wonks.  Please read it.

He wrote a balanced and thoughtful piece, filled with stories of people and how they are compromising  / adjusting or indeed thriving in this environment.

However if you want to see what sticking with the Euro can do to a population (think Ireland, Italy, Spain, Portugal, Latvia etc), I have picked out only a few of his words.  

A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”

It’s not uncommon to see decently dressed Greeks discreetly rummaging through garbage bins for food.

The crucial difference is that now well-educated young people — future doctors, teachers and engineers — are leaving, suggesting that what is taking place is the hollowing-out not only of an economy but also of a whole social system.

The loss of young people worsens another problem facing this country: the birthrate is among the lowest in the world — and was even before the crisis manifested itself — making it unable to maintain population levels.

As the Greek government adds new taxes and surcharges onto its citizens, they respond with protest or evasion.

And on a more optimistic take on the events: 

Zacharias says the troubles have rallied like-minded Greek businesspeople. “The crisis gives us the opportunity to clean the market of everyone who was trying to make something out of nothing. Then we can focus on what works: creating a real product, using real methods.”

A lot of people seem to be coming around to Zacharias’s way of thinking. According to the Greek farmers’ union, between 2008 and 2010 — even before the crisis reached its height — 38,000 people lost or gave up their jobs, as their dream of euro-capitalism died, and returned to the land, often to their home villages on the islands. Former accountants and Web designers are growing potatoes on Naxos, collecting resin from mastic trees on Chios and tending wheat fields on Crete.

Many of those who have lost jobs in the city therefore have rural homes to retreat to, though whether there is income once they get there is another matter.

And Ambrose Evans-Pritchard wrote more recently in the Telegraph:

In 2011, the Greek economy contracted, not by the forecast three per cent, but by six per cent. Sixty thousand small firms closed, and unemployment rose to 20 per cent. As bank accounts are emptied, Greeks are reverting to barter. Farmers are bringing eggs and vegetables to their cousins in urban areas. Well-dressed people are to be found discreetly rummaging in bins for food…….Remaining in the euro guarantees a generation of poverty and emigration.

Suicide rate in a country has always been a strong indicator of an economy's performance, sad but true.  But the big trends are decimation of the population with respect to its savings and future prospects as the elite educated youth move off-shore.  Communities and families re-bonding.  Abandonment of the consumption at any price philosophy.  And a return to essentials, of food, health, water and self reliance in the country. 

Which is why I keep banging on about inflation of the essentials.  It is reported elsewhere that in some parts of Greece, even Aspro or equivalent is not available.  Is that inflation?  (Theoretically no).

It is not worth it Greece.