Grexit and Brexit: The unholy connection

Grexit and Brexit: The unholy connection

Many of my British friends have been asking me lately “What is going on with Greece? The country is no longer in the news? Are things better?” At which point, I just want to scream! But, of course, I do not! I have been trained as an academic; hence, screaming should not be part of any sensible conversation.

Yes, what is happening to Greece is preeminently sensible, and logical, and expected. The country is just completing Phase 1. Successfully! The New Left Government followed European rules almost to the letter and they brought about the eagerly anticipated result. Greek State assets have already been transferred or they are about to be transferred to foreign hands. The main beneficiaries seem to be Germany and China. Of course, this type of discrimination does not sit very well with the French but this was to be anticipated. All is well that ends well!

So, we are successfully entering Phase 2 of the Grand Plan. This is the transfer of private properties to foreign hands. In this case, I expect that the distribution will be fairer. Although some of the private properties will be confiscated by German Funds, I expect that large chunks will fall in the hands of French, British, American and other private organisations. As I am always in firm opposition of any discriminatory practices, I am over the moon about the result. The power of the Free Market will prevail.

While the Greeks started receiving final notices on their homes, an interesting hiccup temporarily stopped the process. No, the Greeks have not rebelled. And they are not likely to do so for several reasons I could explain in another post. Instead, the British went out of their way to save Greece. No, Cameron is not the new Winston Churchill, although posthumously we may also declare him our great benefactor. He is responsible, though, for setting up the British Referendum in July.

So, how can the British Referendum save Greece? Well, in absolute truth it cannot. In the bigger scheme of things most Greeks will lose their homes over the next couple of years. However, it can stall the process for about a month or so. There seems to be an agreement among several parties in the European Union that all negotiations with Greece should be halted until the Referendum is over and done with.

As Phase 2 is about to be implemented, there is a general expectation that things can get nasty in the European South. If the press picks up on the mess (yet, again) the British public may get scared. If Europe can treat this way one of its members, why should the British Public vote to remain in the Union? Why should they jeopardise their own future within a less than democratic Europe? The Germans, the French and the British government agreed (alleluia!)  that they should keep a low profile with regard to the Greek Issue. For now.

After the end of June we should expect an explosion of news! For the past few weeks individual members of the European Union started implying that the Greek Debt may be reduced. I have a feeling that this will happen only after the private properties pass into the hands of foreign investment funds, a couple of years down the road. At that point, they will need to start boosting the economy, so that the funds can reap some profits. So, my prediction is that in July we will have a bit more of the drama we faced last year. Whoever mentioned a haircut of the Greek Debt will retract and they will start applying more pressure for more taxes on private assets.

More exciting times to come!

Economic historian and numismatic consultant

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