By William Mills
Greece may actually weather the current financial storm rather better than its Eurozone creditor nations led by Germany, and the real losers are likely to be the euro civil servants who are in such a flap of self importance at the thought of losing face.
Since the Greek banks closed their doors over a week ago the Greek economy has been working on a cash only basis as indeed many countries have operated their economies outside of normal currency and banking rules and flourished.
The old east european communist countries had ‘micky mouse’ currencies. Zimbabwe uses a hotch potch of US dollars, sterling, rand and their own currency. South Africa got by during years of sanctions.
Two million Britons who holiday each year in Greece are being advised to carry large amounts of cash. Soon they will be told to pay the hotels direct who in turn will pay their suppliers likewise. Dixons are said to have paid their Greek branches’ staff in cash flown in from abroad.
Greece isn’t going back to the drachma, instead it is going to evolve into a cash only economy with the euro as their currency of choice. After all the bank withdrawals since January the country must be awash with bank notes.
Is it possible for a country to ignore the banking system?
Well, in the USA where the bank branches aren’t as developed as in Europe, Americans regularly carry out large transactions with cash.
Nobody buys their drugs with a credit card
Also the billions involved in the international illegal drugs trade are largely bank free. It is a cash only trade. Nobody buys their drugs with a credit card. Could a nation operate like that?
In Colorado and Washington State where cannabis trading has been legalised at state level whilst still a criminal offence under federal law, the traders aren’t allowed to use conventional bank accounts so huge wads of cash are being transported around in security vans.
Back in the 1960’s in the UK very few people had bank accounts and credit cards were a novelty. The majority were paid weekly in cash.
Greece needs banks to borrow from the ECB in order to pay Government pensions. If Germany is preventing Greece from borrowing any more, the Greeks best course of action is to default on the loans and switch to a cash economy. There are plenty of euro notes in circulation-just get paid in cash. Fresh notes will come in with the tourists and the likes of Dixons.
Can the eurocrats stop Greece using their currency? Can the US stop Zimbabwe using wads of US dollars for its transactions? Has anyone succeeded in stopping drug dealers and international criminals using whatever currency they want?
Didn’t Iceland let their banks go under and default on all their overseas’ loans? They seem to be going from strength to strength today.
The euro civil servants need to realise that the one thing we can do without is them.
Germany is the country that stands to lose the most if a deal isn’t achieved. The longer Greece gets by without the banks the less its population needs them. Cries of what about imported medicines can be answered with Iraq, Iran and Syria all seem to manage with good old cash and a bit of international aid.
Without the debt repayments Greece will flourish. Germany on the other hand will be facing a tremendous strain on their banks because if Greece gets away with defaulting other indebted nations will be watching closely.
Iceland was the first, could Italy be next? Germany must either have the ability to enforce the debts through greater political union, or it will have to write the lot off.