Land of Gyro says Oh No to Euro

The result is in and the Greek people voted 61% No or ‘Oxi’. If you think understanding the result is difficult, look at the question:

Should the agreement plan submitted by the European Commission, the European Central Bank and the International Monetary Fund to the Eurogroup of 25 June 2015, and comprised of two parts which make up their joint proposal, be accepted?

The term “Oxi” has historical reference in Greece where they actually have “Oxi day” on October 28th. It commemorates the formal response Greek Prime minister Metaxis gave to Mussolini who demanded military access back in 1941.  So “Oxi” itself has nationalistic implications.

Either way, whatver the Greek people had voted it was going to be a Hobson’s choice in this referendum: a slow financial death by strangulation or slow financial death by drowning.

The news outlets has been covering this for a number of years but bottom line is Greece is unable to pay off it’s prior loans nor function as a country without access to more loans. A real life Greek tragedy, Greece (with the help of the Goldman Sachs) fiddled the books to join the Euro but after a nice boom with access to low interest rates, it found it could not keep up with the other commitments that joining the Euro entailed. Hosting a mega party of it’s own,  the 2004 Olympics, certainly didn’t help which cost €9B Euro which did not include infrastructure upgrades.

What do you mean we have to pay it back?

J. Paul Getty one said “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem”. In Greece’s case, they owe €360B to other European countries and institutions so the bank owns a disaster.  From the Greece audience, the scary masks in this play are worn by “The Troika” (The European Commission, the European Central Bank and the IMF) and the Germans, who are the biggest country lender. Angela Merkel gets a particular “Boo hiss” from the crowd.

On the opposite side of the theater, the other argues the villains are the politicians of Greece (especially Syriza who are radical ultra-leftist organization) and Greek society’s failure to cut back of their lifestyle and draw in more taxes.

However, since this site is about travel, we are here to look at it’s consequences for the Greece as travel destination.

While some are stating this will make Greece an even cheaper destination, the concern is the very real threat of Greece running out of money and the economy grinding to a halt. Banks are “on holiday” (polite way of saying enforced shutdown) to prevent a run on money. ATMs have been limited to €60 withdrawals for locals but no limitation for foreign bank holders. It is expected this will go down to €20 per day as access to cash in circulation dries up.

As we speak, some people have been panic buying essentials. Even if you have cash in hand, in the near future you may find out you cannot spend it if the shops are closed, Taxis cannot fill up with gasoline and access to modern medicine dries up as they cannot pay their suppliers. Things could get out of hand very quickly and even if you have credit cards, you may not be able to use them.

The nearest analogy I can think of on a country experiencing economic collapse is Argentina back in 2001 where capital controls were implemented very quickly.

If you are planning on going to Greece soon, you should pay attention to this situation. You may be stuck there for a while.  The Economist has a good article for those wanting to read more.