Putting Greek Debt to Bed

After months of increasingly acrimonious “dialogue” between the Greek Government and its major creditors, matters appear to be coming to a head with the call for an emergency summit of European leaders on Monday.

 The European Central Bank told a meeting of euro-zone finance ministers on Thursday that it was not clear whether Greek banks would be open on Monday, expressing concern about the accelerating pace at which Greeks are removing Euros from Greek banks, put at €2 billion of deposits this week alone and triggering fears that a breakdown in talks would spark a further flight of funds and the need to install capital controls.

The term “barn door and horse bolted” comes to mind if one looks at the “capital flight” from Greece over the past six-years, not just this week.

19 June 15 Blog 1.

In April 2013 as the financial system in Cyprus was imploding I wrote an article entitled, “Deposit warning, It’s Not Just Cyprus,” providing the following warning:

“Contrary to what you may read in the press, Cyprus was not a one-off, it’s fast becoming a blue-print for future bail-ins, with policymakers suggesting that it’s only “fair” that depositors should shoulder a share of the losses rather than just the tax-payer. (Somehow failing to recognise that they are often the same entity.)” The residents of Greece are obviously making alternate plans for their bank deposits.

Everyone is getting rather tired about Greek debt, so let’s hope that policy-makers can find a workable solution on Monday to put the problems to bed.

As we said in 2013, “It’s not just Cyprus,” and it will not just be Greece. There are legal tax-efficient solutions to prepare against the next one and the solution doesn’t have to be as follows:

19 June 15 Blog 2.

 

 

 

 

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