Tuesday, June 30, 2015

What's it like for a Greek chemist these days?

Any anecdotes about life in Greece for an academic or industrial chemist right about now?

Gotta say, the announcement of a bank holiday was rather surprising to me, although it probably should not have been. But I could have sworn I heard news reports over the weekend claiming that there was little likelihood of such a thing.

Any bold predictions as to how this all will play out? I foresee continued muddling through, but I could be wrong. 


  1. CJ: Wait until Mr. Putin weighs in! He is hoping that "Euro" unification of Europe fails big time. Russia may be weak but still strong enough to play a mischief monger tempting Greece with all kinds of sops. Anyway, both Russia and Greece are integrated by their belief in Christian Orthodoxy!

    1. It's an interesting thought, but I suspect more likely of the USSR of yesterday than the Russia of today. Mr. Putin's actions have been - at least with respect to populated areas - largely irredentist rather than expansionist.

  2. "I could have sworn I heard news reports over the weekend claiming that there was little likelihood of such a thing."

    That was your first clue.

  3. In this photo of a Grecian bank queue, there is probably a chemist.


  4. Some not-so-bold predictions - Greece exits the EU. Enterprising Greeks will turn to people-smuggling - there is no financial incentive for Greece to bear the costs of EU immigration enforcement, and some financial incentive to simply collect money from the illegals passing through. As a practical matter, this makes little difference with the current situation, except the Greeks profit from the illegal immigration to the EU. Meanwhile, capital controls will prove to be unpopular and will fail miserably. The drachma will be reintroduced and pegged to the euro, but will be subject to chronic devaluation.

    1. I applaud you, Anon334p, for actually making falsifiable predictions. Let's see if that holds up.

    2. With apologies to Virgil, I guess the EU should "Timeo Danaos et fraudi ferentes" or "Fear the Greeks, even (those) bearing grifts."

    3. I don't trust their economy to build and transport a gigantic and well-built wooden horse a few hundred of kilometers past their border. I would be very suspicious if such a thing showed up on the border of my country, and said 'Made in Greece' yet had a nice cedar body and good polish, plus could move a long distance on giant wooden wheels without creaking.

    4. *sigh* "I take it you're not a golfer..."

    5. My suggestion is along the lines of those from anon 3:34. The Germans should pay the Greeks to keep the illegal immigrants. Then peg the drachma to the euro, on the conditions that the Greeks keep up their end of the bargain.

      "Die Bild" Zeitschrift also recommended that the Greeks sell an island to the Germans. That however, would be a shame, since it would then become overfilled with lower-class German tourists of the sort who read "Die Bild" in the first place....

      On the other hand, the referendum for this Sunday amounts to political mastrubation: you can't have your cake and eat it. Should the Greeks have ever been let into the Eurozone in the first place?

    6. Good post, although I wasn't making suggestions - more like "cold read" predictions.

      The costs of apprehending and retaining the illegals will outweigh whatever financial incentive the Germans will realistically offer and definitely outweigh what they will actually pay - no aspersion on the Germans intended. Actually a version of that kind of experiment has more or less been tried in the US in the southwestern states, and has failed miserably, with those states bearing most of the costs of the federal government's unwillingness to enforce federal immigration law, and even borders for that matter. Better to profit from passing them along, which it turns out they've been doing, just with Brussels taking more of the cash.

      The intra-EU sale sounds like a better idea until one starts to consider the potential property rights issues and how private property rights might be affected. Also, I'd hate to allow the US government to consider such an option as recent precedent when the shoe drops on US debt.

      On the referendum, agreed, and I agree with the implied answer to your rhetorical question - Greece should never have been let into the Eurozone in the first place.

  5. The "chronic devaluation" rings all too familiar. Having lived through a year of 9000% inflation on an academic scientist salary I would predict that industrial chemists are going to do a bit better than those in academia and government. The magic ingredient is the speed of adjustment.

    1. Holy cow, 9000%? Where you at?

      As for the prediction, you're right, industry adjusts quicker to external economic stimuli. Problem is, more frequently than not the adjustments include RIFs, mass firings, layoffs, and their ilk. Then it looks really, really nice to have an academic, or better still, a government job. In this country, once you get a government job, you can:

      spread feces and blood on the office walls...


      view porn during the whole workday, for months on end...



      ...and *still not get the sack* while your industry counterpart, guilty only of competence, loses months of salary and ultimately accepts a pay cut to go back to work.

    2. The problem is the adjustment of wages to the inflation. The wages paid by the government (including academic) were adjusted for average 3-month inflation. The industry wages were adjusted each month. Do the math.

      The net effect was like a giant shop vac was connected to every supermarket. For about a year there was no food waste because there was shortage of just about every food item in stores. The picture etched in my mind was of grocery store shelves lined exclusively with bottles of industrial strength vinegar. Yum.

      Some of the same components is see in Greece now: sky high national debt, make-believe economy, laws and regulations in very low esteem, multiple external economic and political crises.

      For us the solution was negotiated writing off the debt. I don't think Greece is going to get that chance.

    3. Which part of: "As for the prediction, you're right, industry adjusts quicker to external economic stimuli" did you not understand?

    4. OK, let see... That would be "quicker", "external", and "stimuli". In a centrally planned economy I described the "quicker" is an anathema because it falls outside of the 5-year plan. The economy was a dinosaurs and not the T. rex type. "External" doesn't apply because the primary source (USSR) was on a death bed and the secondary source (banks and other governments) were done dumping good money after bad (that would be the "stimuli").

      What got us out of the bind was a massive systemic change, both internal and external, most significantly mind shift in EU banks and to minor extent the fall of USSR. Today Greece may not get either chance.

    5. Yep, you clearly misunderstood the entire sentence. You yourself later said, "The wages paid by the government (including academic) were adjusted for average 3-month inflation. The industry wages were adjusted each month." The industry wages were adjusted more quickly than the government wages. Hence "quicker." "External economic stimuli" because inflation in relation to the industry is an external economic phenomenon. You took issue with a sentence that essentially agreed with your initial comment. My point was that although businesses generally have a quicker response time to externally imposed events like inflation, their responses are frequently not nearly as beneficent as inflation-adjusted wages.

      The Grecian issue is also not really whether the debt gets written off, it's whether the repayment plan is extended (yet again) and whether the EU should expend even more resources to keep the charade of the viability of the repayment scheme afloat. The EU perspective is that Greece has acted in bad faith, moreover, that any additional lending at this juncture would simply be throwing good money after bad. If Greece is expelled from the EU (a likely outcome), then this will help precipitate your "massive systemic change" and force some short and very sharp adjustments - not least of which will be the reintroduction of the drachma and consequent rapid devaluation of the same. This is why the Greeks are queuing at banks and ATMs now, to load up on Euros before this happens.

    6. Apologies. The difference was in the background assumptions. In the economy I experienced "business" in the market economy understanding was perhaps 1% of entities (privately owned). The rest was owned by the central government. The "businesses" didn't react because the could or wanted to. They reacted because they were told to by their owner - the government. The government was telling its enterprises to adjust wages faster than it was willing to do that for its own employees. The pay scale and adjustments for individual industries or companies were often worked out at the ministerial level. The distortions of market value in that system are hard to imagine today.

      As to Greece today that kind of massive change in ownership and gaining enterprise independence is not available. I think you are right that the expulsion, devaluation, and poverty for most in Greece is inevitable. The EU is under a mistaken impression that it can burn this lesson in the minds of citizens of Greece, but also Portugal, Spain, Italy etc. These lessons are never retained long-term, so forcing them is a waste of time and economic opportunity, and may result in creation of the kind of weak state Greece was after WWII.

      Back to experience in my home country, the bailout and ownership changes allowed us to avoid poverty (for the most part). However, to some extent the corruption, and the disregard for principles of co-existing in the same society continue. In my opinion only time of 2-3 generations of living in a reasonably prosperous society, and with pressure to follow those ideas will make change of mindset permanent.

      For Greece a bailout now would make this long-term hope possible. Casting out of EU will create a society of "paradise lost" mindset. Growth to prosperity is near impossible when most people want a chunk of what they lost, even if they should never have received it. This is not about logic, it is all about emotions.

    7. Apologies accepted and reciprocally extended.

      Actually, the government mandates and resulting distortions that you describe in your first paragraph occur here as well - owing to various factors (including a decrepit/compromised media) it's not as obvious and not nearly as uniform.

      I suspect you are right in your assessment of "remainder infrastructure" for Greece, and you correctly point out that the EU has an added incentive to expel Greece to keep the rest of the PIIGS nations in line, recovering what it can from them. As for the permanence of the example, I would agree that it's human nature to gradually disregard lessons, but disagree inasmuch as the Greek example will still be in front of them, as it were, for several years.

      As for your opinion about how "only time of 2-3 generations of living in a reasonably prosperous society, and with pressure to follow those ideas will make change of mindset permanent," I think there's something to this. It reminds me of a study of Italian democratic traditions a couple decades ago, where the author's finding was that these traditions were strongest where they'd been in practice for the longest period of time - that there is a kind of feedback effect (or "Matthew effect" for the biblically inclined) from and to societal practice.

    8. This is a strange day. I find myself agreeing with something....

      Yes, the Greece example will be in front of us for a long time. If the developments of the past few hours can predict anything it will be also an example of stunning lack of leadership. I don't think Greece will be a behavioral lesson for people living in PIIGS other than teaching them to make stronger demands and negotiate less. The change to a more sustainable economic life happens at the level of a single citizen. The way to influence people who desperately cling to the demand philosophy is to incorporate them in a functional society and coerce and cajole them to function along.

      Nation building on any scale doesn't work. It is bad for those who build and for those who are forcefully reconstructed. Nation growing on the other hand is what we always do. Successfully. Except when we "build" or "un-build".

    9. "... it will be also an example of stunning lack of leadership" - Hmm... on Juncker's part, or Tsipras'? Presumably you mean the latter - I'm not sure that's his problem.

      "I don't think Greece will be a behavioral lesson for people living in PIIGS other than teaching them to make stronger demands and negotiate less." Possibly, but I rather expect that if expulsion occurs, with all that that may entail, the resulting decline will in fact be a salutary lesson for the remaining ('PIIS?' 'PISI?' - somehow these sound too disrespectful) nations.

      "The change to a more sustainable economic life happens at the level of a single citizen." Granted, but conversely single citizens cannot necessarily effect changes to more sustainable economic lives.

      "The way to influence people who desperately cling to the demand philosophy is to incorporate them in a functional society and coerce and cajole them to function along." Also, I think you have to guide their interpretation of events, otherwise you may eventually get a reversal which is self-accelerating (and ultimately a complete breakdown).

      "Nation building on any scale doesn't work." This is debatable. I would say I'm inclined to agree in part, however, Japan, South Korea and Germany represent significant counter-examples. Ultimately I suppose my view has to be that it sometimes works, dependent on the culture of the nation to be built, the circumstances, resources, and culture(s) of the nation(s) doing the building, and the historical specifics which play a role (e.g. existing global conflicts and alliances, state of the world economy, etc., etc.- the list gets long and involved and is probably better left to someone with a greater background in political philosophy and modern history than I possess). Also long-term and extensive military, political, and financial commitments are required for the nation(s) doing the building. I would go so far as to say there are some exercises in nation-building that are incapable of succeeding on cultural grounds.

    10. Japan - I understand that the first few years under MacArthur were not that smooth, especially around the time of the land reform. What helped was not overthrowing the emperor, and then the Korean war as Japan converted to an ally and a base for UN (US) forces.

      Germany and South Korea - both countries were divided in a state of war with the other half. The US was a necessary ally and the other side (SU or NK) were a bigger enemy.

      All three cases were centered around a common enemy, so it was much easier to be the good and helping guys. This is much harder when there is no Marshall plan or when the strife is internal.

      With few exceptions a single citizen may not change the course of a nation. And yet a nation is a bunch of single citizens with a common set of ideas. A downgraded, resentful citizen will spread unhappiness like wildfire when his fellows don't have much to look forward to. The same unhappy fellow would need be among people who are consistently doing better to turn around and be fully productive.

    11. I think what you point out re: Japan, Germany and South Korea are covered by the 'historical specificity' and 'circumstances, resources, and culture(s)' - also 'extensive...commitments' parts of the discussion - you did well to point out some of the specifics (although there are others). Japanese post-war land reform is an interesting topic in this context. My impression is that it was in part instituted to solidify the underpinnings of the nascent (transplanted) democracy, and yet it contributed heavily to one-party rule by the 自由民主党 (LDP) for most of the post-1955 historical record. Proof of success in attaining stability? Or testament to the fundamental difficulty in transplanting foreign governmental concepts? I believe it is the latter.

      We seem to broadly agree re: the single citizen. I would take issue with your characterization of a nation as 'a bunch of single citizens with a common set of ideas,' - I think it is both more and substantially less than that.

    12. Re: citizens - fair enough. I did simplify on purpose to highlight the hazards of creating unhappiness in a country so close to Middle East. POTUS is right that Greece is a US strategic interest. Both the austerity and the expulsion from EU are going to be bad for the Greek society. In the absence of debt write-off the only way out I can see is a relatively quick program for the return to EU after default. Otherwise we will see Cyprus in play very soon at a time when Turkey is unhappy and weakened. Then there is the China idea and Russian gangs are well established in Cyprus already.

      Re: leadership - Tsipras, of course. He gets my points for at least trying to stare down Merkle and loses twice as much for execution. Also, I don't think he took (or had) the time to fully grasp the stakes and the finer EU interests.

      Re: Japan and SK - I think that the differences in the concept of happiness (individual and group) make direct comparison to US too complex. They got their democracies to the point of stability and the US is not going away. That is good enough for me. I just accept that there will be pockets of amazing incompetence (like Fukushima) right next to their technical excellence.

    13. Well, you've lost me on some points here. China idea? I rather imagine the only interests the Chinese might take in Greece would be in tourism development ventures for a few high-ranking Party officials and influential business people - i.e. unofficial and strictly business, with an eye to emigration. They also might be interested in some ag/food production investments.

      If the expulsion of Greece from the EU is carried out, I think there is implicit in that a recognition by the EU generally that Greece can never make good on its debt - but the EU can't afford to set a bad precedent by officially writing it off. Hence the outcome may be an unofficial write-off. Under this scenario Greece will have to deal with its private (and other) creditors as best it can - the EU will consider the loss the cost of maintaining the integrity of the remainder of the EU and bringing the "PISI" nations into a higher level of compliance. Plus, as apparently there is no framework for the departure of a nation from the EU, there is no framework for its readmission. (Similarly, there apparently is no provision for newly independent nations, split from EU parent nations, to join the EU - it's enough to make one wonder what the hell ever happens in Brussels, that these likely events have never been anticipated).

      On Japan and the ROK, not sure that there was any comparison to the US implied - although I've never put much stock in facile stereotypes of the sort you appear to endorse here. Nor would I assert that "the US is not going away" given recent defense cuts, periodic signs of dissatisfaction with the ongoing US presence, and recent discussions about re-armament in the context of Chinese threats to contested possessions (and to traffic in international waters). Also not comfortable with bringing up Fukushima in this context - in the US, by comparison, I routinely see garden-variety failures to even plan for something as mundane as 'ten-year event' rainfall.

    14. Weighing briefly into the question of Grexit. On the question of Greek debt, a BBC broadcast from today claimed that ever since the formation of the modern Greek state, back in roughly 1840, the Greeks have had a national debt. I don't know the details of that history, but if taken at face value, then the EU would not be making a precedent for kicking out the Greeks.

      Besides, IMHO, the EU is a useful construct for maintaining stability between major European powers which, in the past have had significant ethnic and economic clashes over the past few centuries. Greece is a different situation.

    15. "Besides, IMHO, the EU is a useful construct for maintaining stability between major European powers which, in the past have had significant ethnic and economic clashes over the past few centuries." Unlike, say, Africa, Asia, or South America, none of which have had significant ethnic or economic clashes over the past few centuries. /S

      The EU - the greatest contributor to European economic, monetary, and political unity since Hitler, and before him, Napoleon.

      Currently the assessment in many member states is that membership in the EU comes with excessive compliance costs and appears damaging to the economic health of several of these states. Also it seems totally incapable of handling immigration or immigration enforcement effectively - not that the EU is alone in this.

    16. There are many points of view on national debt. I happen to believe that some revolving debt is good because it allows for more efficient governance and it keeps deflation in check. Debt that generates inflation and threatens sovereignty is definitely bad. A bigger problem than the debt itself is deficit spending. Again, I think that small deficit (under 2-3% GDP) can be a smart investment but bigger, continuous deficit is a very bad idea (unless you own the printing press).

      Before 1986 Greek national debt was below Eurozone average and only spiraled out of control in 2007-2008. However, this history is based on official data and the Greek government has already admitted to massive fudging of data. On the other hand the lenders were supposed to check the data rather than use the no-doc no-income mortgage style.

      Greece is no stranger to European organizations. EU is a distant offspring of the Marshall Plan (ERP) which required participants to play nicely. Greece was a participant in ERP and, with Turkey, its first recipient. It was essentially excluded from cooperation during the junta years (1964-1974), but before and after that period it was a reasonably strong participant so perhaps it can be viewed as a worthy nation.

      I wrote that debt may be OK but large budget deficit is not. Greece has had continuous and large budget deficits since 1981. I mentioned governmental "forgetfulness" when borrowing money. Even more such forgetfulness led to joining the euro which Greece should have never been allowed to join (too large deficit). When Greece kept throwing its chances out the window (corruption, tax evasion, bad governance, huge military spending, Olympics spending, loss of monetary control) eventually something bad had to happen.

      I don't think that Greece should be banned from EU because it has been behaving badly since 1840s. I think the Greek society needs a lot of growing up and the last 60 years were not conducive to developing personal responsibility. I can't see how this can be accomplished by casting Greece off. Review of history may show that humiliated societies don't develop well. This is why ERP included Germany and why the Paris treaty did not require post-war Germany to be a permanently marked state. Compare this to the Weimar Republic.

  6. With China bloated with foreign exchange reserves in upwards of trillion dollar plus, it can afford to buy some uninhibited Grecian islands. In doing so it can pay off Greek debt (300B dollars) and then some for additional ongoing expenses. That way China does not have to build the islands of South China Sea pissing off its neighbours and it also has a base in Europe. It's called win-win situation!

    1. I really love the phrase, "uninhibited Grecian islands."

    2. Wow! Good analogy. The win-win translates to a win for China now and a win for China in the future. I think that EU faced with that kind of possibility would immediately write the Greek debt off. That would be a cheap price to pay to avoid a Maxi Hong Kong on the soft underbelly of Europe (paraphrasing Churchill, I think).

      For the scientist in the original post only the write-off is a good change.

    3. As for "That way China does not have to build the islands of South China Sea pissing off its neighbours" that's really kind of the point - the PRC wants to extend sovereignty over contested parts of the South China Sea that it considers strategic - either in terms of defense, or in terms of potential for petroleum extraction. Hence, unless those Grecian islands are mobile (unlikely) or happen to be sitting in the vicinity of a heretofore undiscovered oil-rich deposit (also unlikely) their appeal would be strictly limited as replacements for the PRC's South China Sea island development scheme.

  7. I found this article to be informative, as old as it is (2012). It indicates Greece relies pretty heavily on EU institutions for higher education and research advances, which is not surprising - the implications for Greek chemistry scholarship and research should the expulsion occur are, to say the least, not good - which is also not surprising. Of course, the article goes into greater specificity, discusses various national institutions and organizations that are affected, and quotes a few people close to the issues.


  8. I think some of the lyrics of Bob Dylan's "It's Alright Ma (I'm Only Bleeding)" are relevant.

    An’ though the rules of the road have been lodged
    It’s only people’s games that you got to dodge
    And it’s alright, Ma, I can make it

    Although the masters make the rules
    For the wise men and the fools
    I got nothing, Ma, to live up to

    While money doesn’t talk, it swears
    Obscenity, who really cares
    Propaganda, all is phony

    1. Who is this guy? Is he some kind of poet or song-writer or what?

    2. Oh, I see, he's an actor.


  9. Who is this guy? Is he some kind of poet or song-writer or what?

    1. Yes, he is. https://en.m.wikipedia.org/wiki/Bob_Dylan

    2. "I knew a man, his brain so small
      He couldn’t think of nothing at all
      He’s not the same as you and me
      He doesn’t dig poetry
      He’s so unhip that
      When you say Dylan, he thinks you’re talkin’ about Dylan Thomas
      Whoever he was
      The man ain’t got no culture
      But it’s alright, ma
      Everybody must get stoned..."

      - From "A Simple Desultory Philippic (Or How I Was Robert McNamara'ed Into Submission)" by Paul Simon

  10. For me, our new Greek Odyssey took an unexpected turn vis. the crisis' impact on Greece's neighbors, especially Bulgaria...


    Apparently some Greek businesses are now accepting Bulgarian levs. Also surprising to hear about the numbers of expatriate Greek businesses operating out of Bulgaria that are expected to be hurt by the crisis. There's even some consideration of resulting destabilization of the entire region.

    1. The acceptance of other currency over euro is to be expected. According to Copernicus weaker currency always replaces stronger one in circulation.

    2. Yes, that's fairly obvious - but I expected in this case that there would be a preference for euros and dollars. Bulgarian levs were a joke in Greece not very long ago.

    3. Looking more deeply into your comment, Gresham's law does not apply here. Gresham was specifically observing the phenomenon where it was preferable to circulate a debased coinage than the more valuable coins *of the same denomination and currency.* Legally they are the same, hypothetically they are equally acceptable, but in reality the metals content of one differs from the other and is hence more valuable. But this does not apply with paper of differing currencies.

      In this case you have the threat of the imposition of an official currency (drachmas) which are expected to be (massively) devalued relative to other currencies - the difference being that in economic exchanges, no one will want drachmas, they'll prefer euros, dollars and (apparently) levs. As the drachma declines in value, what one would realistically expect to see would be a substitution of foreign currencies in progressively greater numbers of exchanges, even following attempted currency revaluations ("new drachmas, anyone?") - to the point where these foreign currencies (or even barter) are the de facto media of exchanges. The same thing happened in Mexico in the 1980s, and has been relatively persistent there ever since - even following the introduction of the nuevo peso.

    4. Currently the preference to hold currency is euro ~ USD >> levs. Conversely, the preference to circulate would be levs >> euro ~ USD. Businesses accepting levs can retained euros gained from other transactions and pay their suppliers in levs. Since their suppliers also pay other businesses they would have similar incentives. The longer the banks stay shuttered the stronger the incentive to circulate levs and retain euros. At least salaries still have to be paid in euros.

      When drachma is introduced euroes will vanish in the sock drawers, levs or something else will be used to pay for services and goods in short supply and drachmas will be used in all other transactions. Since the government will be paying exclusively in drachmas businesses will be reluctant to contract any services and the government will need top hire oodles of underpaid workers directly.

      The next step down this ladder is the government paying in goods (food etc.) directly to retain any workers at all.

    5. It is worth noting that at that point the food distribution will probably fail within 6-12 months and the Greek population will face a humanitarian crisis in addition to "just" financial one. EU will have to step in and directly manage the response because the rapidly mounting need exceeds the abilities and resources of any single government. Humanitarian mission on that scale is incredibly inefficient and I doubt EU would realize much savings over debt write-off.

      It is also possible that the help will not be granted and the local situation will devolve with unrest and loss of control over local governments. The logical progression is a military take over with associated casualties and economic deconvolution entrenched for at least a generation. Greece was down that path before. For EU the rescue price tag becomes higher with every step down that path.

  11. My earlier reply got "eaten" so here's a slightly different and shorter version:

    I don't think levs will ever have quite the negotiability that euros and dollars have. Some businesses will accept them, others probably won't. Most likely a small industry will develop involving travelling to Bulgaria and exchanging levs for euros there. The reintroduction of the drachma will likely involve restrictions on transactions involving other currencies, driving more economic activity underground, which will take place in euros, dollars and (to a lesser extent) levs. Owing to these restrictions, however, there will still be a need for drachmas to fulfill official and monitored transactions and to thwart investigations (e.g. 'plausible amounts' will still be needed) - you're right there.

    I doubt this will play out quite as you've got it on the governmental level, though. The humanitarian crisis is already upon them, although for medical supplies. I think it will play out differently with food, more likely a return to traditional diets, with subsistence agriculture in some places, and possibly an ill-advised self-sufficiency campaign, but very little actual starvation.

    1. Re: food - I am writing from my own experience in somewhat similar situation. Yes, there was little to no starvation. There was huge food insecurity and scrambling to find the 2.5kcal+nutrients for each household member every day. When it takes 5-6 hours each day to get food the the emotional toll on everyone is very significant. In addition, you get large crowds of of very irritated people waiting in lines for deliveries. This is a tinderbox. All you need is someone to yell "go get it" and the crowd redistributes anything it can find.

      There food economy fragments and people cluster around those who know a farmer or have transportation. You either belong and eat or you don't belong and lose weight fast.

      Re: currency - This is also from my past experience. The full negotiability of euro and dollar causes them to be saved away from the market and the banking system. The monetary system essentially fragments. The drachma sphere around the government, the levs in semi-underground economy, and the euros and dollars for absolute necessities - like the medical supplies.

      In response to the monetary fragmentation rises a new exchange small business sector inspired by inflexible governmental exchange rate. The worst that can happen is that in an effort to squash inflation the government keeps the rate artificially high and declares the exchanges illegal. The net effect is that there is shortage of dollars and euros for international trade, effective exchange rate perhaps 100s of times higher than official and things like medical supplies are out of reach of most people. In my home town you could rent a 4-bedroom apartment for a month for $20. It happened to be the value of decent salary on open exchange. Obviously, a hugely distorted valuation. These distortions show up in the decision making processes in every business and government body and the economy withers on the vine.

      All this produces very upset and unmanageable population which is just waiting for a populist leader to encourage unrest and disobedience. The immediate backlash is the desire for a military takeover (I wrote about the cost of this above).

    2. No argument from me vis. food - you likely describe the situation very well.

      Vis. currency the only argument from me is I don't think the lev will become the "underground economy" currency - I still think the mainstays there will be the euro and the dollar. I think the lev will be more acceptable to those who transact business in Bulgaria, live in the north, and/or have a 'contact' to go on the Bulgarian exchanges. I understand there is a lingering perceptual issue there that would militate against the widespread adoption of the lev.

      The Greeks apparently have an additional issue with disruption of the tourist trade, largely due to illegal immigration, and this is helping flatline their economy. Hard to say what will be done there, but (somewhat surprisingly) the Turkish gov't has offered assistance with respect to that.

      Your last two sentences seem a likely medium-term outcome. It's a bit reminiscent of "Z" (Costa-Gavras ( Κωνσταντίνος Γαβράς ), 1969).

    3. The current tourist disruption comes at a bad time. For tourism the better choice would be a negotiated bailout since it would take time to make enough drachma available at exchanges. In addition many governments with weak currencies are tempted to skim euros/dollars from tourist by forcing them to exchange some minimum per diem at a bad rate.

      The Turkish government was weakened in the last election especially by the rise of Kurdish parties. The relationship between the government and the military has not been good for many years. The Kurdish parties are maturing, if slowly, and with US support the Kurdish areas near Turkey border are getting stronger and/or more stable. This is not a good time for Turkey to experience trouble at yet another border, so their assistance offer may be a significant commitment worth accepting.