Greece on the edge of the abyss

It's now looking as though Greece could be in default at any time. Those delicious-looking interest-rate swaps that they entered into with Goldman Sachs ["I'll just have one more!"] may be about to come back and bite them in the tail even more firmly than we thought.

Zero Hedge has an article revealing that one more credit rating downgrade either for Greece itself or (and even more easily done) for the legal vehicle which it used to execute the deal, will trigger an obligation to pony up collateral. Which Greece probably won't be able to do, and if it can't, it's going to default, and if it defaults there it's not going to be able to roll over any other debts and then it's going to default everywhere. Poof! Bye-bye Greece.

I can't say I'm very surprised. I visited Greece for two weeks about twenty years ago; one week in Athens for work, another tacked on the end to take a classical tour of the whole country. I went there with my head full of foolish and romantic notions about the birthplace of democracy, theatre, poetry and the arts, architecture, rosy-fingered dawn over the Parthenon, mount Olympus and the wine-dark sea. That had all been knocked out of me by the end of the third day.

Even then, two decades ago, it was impossible for someone recognisablly a foreigner [i.e. me] to sit and eat at a table outside a restaurant in Athens without being continually bothered by shady-looking men coming up and asking if I wanted to go to a club and meet girls. And I mean continually. Every ten or twenty minutes. I also remember reading an English-language Greek newspaper and seeing a report of one of the national politicians praising membership of the EU on the grounds that Greece would be able to squeeze every last drop of regional and structural grants and then spend it all on whatever they wanted.

All rather depressing, and now it seems we're at the far end of that arc. EU funds, and latterly membership of the Euro (and all lubricated by endemic greed and corruption) have done for Greece what the curse of oil has done elsewhere, and now it's time to pay the piper. I'd like to be glad at least that it probably means that Greek property will be cheap in a couple of years, but the truth is that any foreigner who buys property in Greece is likely to be seen as a piggy bank by local officials and politicians, there to be raided whenever the need for cash demands it.