23 July 2015 — “I am become death the destroyer of worlds”
It has been a while since I posted an entry on GrexitDailyNews. I was waiting to see how the agreement on Bailout III will be received internally and externally.
It is safe to say there is little joy and little hope that any resolution to the Greek problem is in sight. I have addressed this in various ways in the last few days, even trying to see things slightly more optimistically (see here).
What I want to focus on today is the apocalyptic effect capital controls are having on the economy. It is needless to say how damaged the economy became since the election, due to the almost total disinterest of the government while it was valiantly negotiating win our ‘enemies’.
Capital controls are killing economic activity. In an environment where manufacturing is entirely dependant on the import of raw materials the inability to make external payments means production has stopped. Weeks after the introduction of controls there is no mechanism in place to authorise payments.
The significantly reduced cash flow and the vertical drop in consumer sentiment are chocking the life of any SME still in operation. Capital controls will stay in place for a long while, as bank balance sheets are significantly impaired. Certainly they cannot be lifted before the banking resolution legislation comes into effect in January. Does anyone seriously think that there will be any solvent businesses left if this keeps up for a few more months?
You know all this already, so why do I bother saying it again? The reason is I am angry. Angry that we keep fighting over VAT increases for the islands and tax cuts for farmers while the economy is dead. Angry that we keep listening to the ‘democratic’ rants of this fiend Kostantopoulou and the soviet nonsense of Lafazanis. Angry that we have to watch Varoufakis become the standard bearer of fantastical revolutions. Angry that we have to watch that dangerous fantasist Kammenos fly around the country spouting nonsense.
When Tsipras caused the uncontrolled bank run that necessitated capital controls by announcing the Greferendum, he became our Oppenheimer, the destroyer of our world.