We have been sitting on a hot grill full burning charcoal for quite some time now.
Occasionally fire resurged, occasionally fire lowers. But we are still sitting on the hot grill. Who are we? We are Greek citizens having deposited their savings to Greek banks.
With the first dive in the Athens Stock Exchange last Friday the charcoals got a vivid fire again.
With the rumors about Greece’s bankruptcy and returning of Drahma on Monday charcoals started to burn our ankles.
No matter how hard we tried we couldn’t (and can’t) get down from the damn hot grill we are sitting. Then we are trapped.
We are trapped and helpless and very little can we do to save our savings.
The symptoms we experience in such distress, resemble those of a panic attack: strong sweating, palpitations, restless hands and feet, pale face, eyes wide open and a mental blackout.
So yesterday it was only after one o’ clock noontime, ( ASE under heavy losses), when we started to call around friends and even foes in search of solutions to our problems, which is the following … one: how to save our savings.!
Meanwhile more or less every saver has made his/her research. Meanwhile everyone knows more or less the available possibilities. So the purpose of the phone calls is primarily to talk about our frustration and distress and at the same time to find out about possible “new” possibilities and if the others have proceeded in “save their savings”.
What to do to save your savings
1) One friend told me that he tried to transfer his savings abroad, to save his all-his-life savings to Cyprus. But he was discouraged by the staff of the bank where he has been depositing all his savings for years. He would need to collect some 10-15 papers confirming this and that and the other…
But of course! Banks here are eager for customers’ cash after media reported in April that some 8-10 Billion Euros were ‘saved’ and flew abroad due to fears of bankruptcy.
2) Another friend thought to trade her savings into Golden Pounds. The most important question thought was: Where to store them. At home? “With so many criminals running and stealing around? Out of question!” Renting a deposit in the bank? Hm… sounded like the safest option … “What if the bank goes bankrupt? How Io get them back?” she asked me and I admit, I did not have any answer.
4) A third friend considered to get all his savings out of the bank and hide them in his flat. He imagined how luxurious it would be to sleep on 50-, 100- and even 500-Euro bills….. Great Idea! If it wasn’t this stress causing horror of being robbed….
4) A fourth friend, who knows better than us, panicked economy amateurs, said she is not worried yet. OK! But if tomorrow the state and the banks declare insolvency, shall I ask my savings back from her?
More or less the same view was expressed by a bank employee whom I asked. “Don’t worry” she said ” but I can’t give you any written guarantee!” gotcha!
Late 2008 the Karamanlis-Government passed a law under which the state guarantees deposits up to 100,000 per bank and per account owner. This is for the case the bank goes bankrupt. But what if the state itself goes bankrupt? Where I will get my lost savings from?
+++++ I just heard this morning (09/06) in state TV that there has been established a special Deposit Guarantee Fund , independant from the State, where depositors pay 1 in 1000% – knownly or not ? – so that the 100.000 Euros are guaranteed . +++++
5) Another option is to invest your savings in properties. Considering the high taxes in properties, the coming decrease in rentals and the fact that properties prices have not gone down, for me personally this is not an option. At least not yet…
Worst scenario in case of Greece’s bankruptcy
So what will happen if the State indeed formally declares, it can not pay back its debts? What is the worst scenario? In fact there are TWO WORST SCENARIOS
1) State ‘freezes’ saving accounts, it takes hold of all deposits. You will be allowed to pick up only small amounts. Let’s say €100 or €200 per month.
Taking into consideration that in national bankruptcies inflation goes inversely to the state finances, for €100 you will most probably be able to buy a loaf of bread or half a package of chewing gums. By the way… once, years ago, one chewing gum was the cheapest thing to buy. Have you have ever noticed that a bread loaf costs 0,60 Cents but a package of chewing gums € 1,60 ?
With one Golden Pound you will may buy one 5 liter canister of olive oil. The question is what to buy olive oil for if you have nothing else to cook in it.
2) Greece goes bankrupt → exits the Eurozone → returns to Drahma → trades forcefully your Euro savings in Drahma savings → devaluates the Drahma→ you wish you had brought your savings abroad.
*** Be ware: I am from the Press, and as you know Press in Greece loves to exaggerate!