We have spent a considerable amount of time in the last week or two
explaining just why depositor withdrawals (or bank runs) are the death knell for
the Euro experiment. We first described the 'run on banks and
governments' on the basis of the potential for overnight loss of
'fungibility' back
in December but the escalation last week in Greece (and the contagion to
Spain's Bankia) signals things are shifting to 11 on the amplifier of Euro-Fail.
This evening brings new information from The
Guardian that 'Police are urging Greeks to keep their money in bank
accounts rather than putting it at risk of theft, amid further
uncertainty about whether the austerity-struck country will remain in the
eurozone.'
Greece's national police spokesman, Thanassis Kokkalakis, told Reuters:
Speculation of a Euro-wide deposit guarantee scheme was quashed somewhat by yesterday's dismally predictable non-event summit - especially given the only three-week span to the next elections. That leaves Greek citizens juggling the possibility of having their home robbed against the probability that the government, via GEURO-isation, will do it for them in the bank.
Greece's national police spokesman, Thanassis Kokkalakis, told Reuters:
Uhm, does anyone remember Cramer and his 'Bear Stearns' call? Or are we just "being silly?""Many people have withdrawn their money from the banks fearing a financial crash, and they either carry it on them, find a hideout at home or in storage rooms. We urge people to trust the banking system, leave their money there, or at least in a safe place, not hide it at home."
Speculation of a Euro-wide deposit guarantee scheme was quashed somewhat by yesterday's dismally predictable non-event summit - especially given the only three-week span to the next elections. That leaves Greek citizens juggling the possibility of having their home robbed against the probability that the government, via GEURO-isation, will do it for them in the bank.
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