Tag: Capital Controls

Battered by the daily news

The morning news make for grim reading at the moment. I take a quick glance through the headlines, my stomach knotting. It’s all a big mess, worldwide. Violence. Terrorism. Domestic murders. Killers on a rampage. Scandals. Corruption. Fighting. Destruction. Climate change. Of course it’s all fact, but sometimes the press seems to enjoy wallowing in it as well. After a summer spent stuck in front of various screens, I avoid turning on the television as much as possible.

In Greece things are still looking bleak. The private sector has mostly borne the weight of the crisis so far, the public sector being traditionally regarded by every government as an untouchable holy cow. It is enough to note that salary reduction in the private sector has reached 20-23%, whereas in the public sector it is barely 12,5% – without even mentioning the fact that most public offices are still employing a large number of people, many of whom do nothing. The increase in unemployment is also much higher in the private sector. Capital controls are still in place, and every new law passed seems to contradict the one before.

While being unemployed is horrible whatever your job, surely having a vibrant market would benefit everyone in the long run. This policy has created a downward spiral: international competitiveness is at an all-time low and every means of getting out of the crisis has been scuppered. A increasingly large number of firms, including shipping companies, are getting out and basing themselves elsewhere, mostly in the Balkan countries and Cyprus. There is also a huge loss of human capital as individuals are emigrating as fast as they can get a job abroad.

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Not only are people given zero incentives to stay, but often special opportunities are lost as well. For example, a few weeks ago I read that Jason Bourne’s next adventure, set against the backdrop of the Greek financial crisis, is being shot in the Canary Islands rather than Athens. Why? Because the film’s makers were put off by red tape and a lack of tax breaks.
Last year culture minister Nikos Xydakis had proudly announced that the Bourne film would be made in Athens — claiming the effect on local jobs and trade would be akin to setting up a “small factory”. But afterwards the government failed to make good on promises of tax breaks offered in most countries. So now Spanish advertisements and street signs in Santa Cruz de Tenerife have been covered over with ones in Greek, while a local plaza is doubling as Syntagma, Athens’s central square. Walls have been daubed with graffiti in Greek and locals signed up to stage anti-austerity rallies.
It makes you want to pull your hair out.

And who is doing something about all this? Not our politicians, that’s for sure. As has always been the case in our long and troubled history, they are busy squabbling (still).The government is in above its head – rumors abound they’re not going to last long – and often does not even get the support of its own party; and as for the opposition, they’re having a ridiculous and costly fight over electing a new leader.

Christmas is approaching. I wonder how we will be able to conjure up a seasonal festive spirit this year.

Capital controls: 15 ways in which they’ve changed our life

1. We have to wait in long lines at ATMs to get our daily cash allowance (€60 which has become €50 since the banks have run out of €10 and €20 notes.) Many people have acquired a ‘secret’ or ‘favourite’ machine – one that is more reliable/less crowded that others.

2. Public Transport is – temporarily – free, only a lot less buses are running. A friend arrived at work late yesterday because she had to wait one hour and two minutes for her bus (usually there’s one every ten minutes.)

3. Any subscriptions to foreign sites (such as extra iCloud storage) are frozen, since Greek credit cards cannot pay money abroad. Same goes for Amazon or other online shopping.

4. Venues booked for weddings or christenings – there are a lot of those at this time of year- ask for part of the money in advance, preferably in cash, so they can pay for the food, etc. People are being creative about their ‘big day’: flowers from the garden, a cousin will do the bride’s hair, sister takes the photos etc.

5. Funerals can be paid for in installments.

image6. Amongst my friends, the only people who have gone on holiday are those who have houses on the islands, or those who had prepaid for a trip somewhere. People trying to book rooms are asked for money in advance, in many cases in cash. Sometimes a friend on the spot can lend a hand.
However, tourists are OK since ATMs still seem to disburse money to foreign credit cards.

7. Some flights have been cancelled and many airlines are not accepting bookings from Greek tourist companies. However, around 15.000 internal flights will be available for around €10.

8. Businesses that deal in cash pay their employees in cash and get praise. Those that don’t can’t pay at all and get complaints. A lot of people have been asked to take unpaid vacation until the banks open (and are hoping that by the time this happens, their companies will still be operational.)

9. Dentists report cancellations for cosmetic appointments such as teeth cleaning or whitening.

10. Pharmacies report a rise in sales for medications used in chronic diseases such as diabetes as patients stock up, fearing a future lack.

11. People are paying with credit cards wherever possible in order to save what little cash they have. But some retailers are already refusing plastic.

12. Meanwhile, people who had money in the bank are trying desperately to spend it, fearing future haircuts. They’re buying up things they consider to have a resale value, such as jewels, cars, and electronic gadgets. To take advantage of this trend, luxury clothing retailers have started early and generous discounts (summer sales in Greece normally start in August.)

13. Generally people are trying to spend any money they have, so bills and taxes are paid promptly!

14. Imports and exports have become very complicated.

15. A lot of shows, especially those with expensive tickets, have been cancelled.