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Monday, March 19, 2012

Is Greece going out of business?

It becomes very problematic for a country when the legal framework is such that actions which are perfectly plausible (and legal!) at the level of the individual are completely against the interests of the country.

A Greek who withdraws Euros from his Greek bank account to either hoard them in cash at home or to transfer them to a foreign bank account (both are perfectly legal) is being perfectly responsible to himself and to his family. The threat of a possible Euro-exit on the part of Greece has been talked about for a long time now. Should that Greek not protect against that risk, he would be less than responsible to himself and to his family.

A Greek who buys cheaper imports than domestic Greek products is being perfectly responsible to himself and to his family. Why should he waste his and/or his family’s resources?

There is obviously a small problem with this. If all Greeks behaved responsibly to themselves and their families as defined above, the country would go out of business even faster that it is doing it already.

As I just said, Greece is already in the process of going out of business. She will stay in business as long as foreigners provide funding. Once that stops, all hell will break loose.

Unless, of course, Greek leadership finally gets around to making some plans for avoiding that the country will go out of business!

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