Irish vote yes but Euro project remains in dire trouble

Billions leaving Spain, Greece and Italy as investors flee

By: CHRISTOPHER M QUIGLEY | Published Saturday, June 2, 2012, 8:02 AM | Updated Saturday, June 2, 2012, 8:02 AM

This vote brings a degree of stability to Irish finances but unfortunately it may be too little too late as it looks like the Euro project in general is in trouble and may not survive.  The game has moved on and it is moving fast.

Capital is fleeing out of Greece and Italy and Spain. Yesterday the Spanish government alone announced that 100 Billion Euros has left the country in recent months. This is not good. It means that the Trillion Euros of support given to European banks by the European Central Bank is not being used to promote investment but is in fact targeted to bail out banks suffering from capital flight. To put it simply there is a run on European banks. This is why Swiss banks have introduced capital controls on Euro accounts wishing to switch into Swiss Franc accounts. Will The American Fed be the next to introduce such controls in an effort to support the Euro and discourage such panic?

 In another strange twist of the unending "Euroblown" saga, Germans have started to check their Euros. Any Euro note with a Greek "Y" designation (All Euro notes have a letter indicating which European Central banks issued it) is being handed back in exchange for a Euro with a German "X" designation. Will the same thing start to happen with Irish, Portuguese, Italian and Spanish Euros? Will foreign banks soon adopt the same policy? If so the Euro project is "dead in the water" despite today's Irish referendum victory.

Switching the focus to Athens it looks like the anti-bailout party is going to win and this will have serious consequences for European monetary stability. If fact Greek society is falling apart and it is hard to see how the European Union can survive when it allows such social disintegration to take hold. Below I quote stories of real Greek people who were interviewed by CNN to give a flavour of what they are going through:

Panos Papanicolaou

47, neurosurgeon from Athens

"There is a big increase in suicide levels and traffic accidents, also in people with heart and psychological problems. So there's more diseases caused by the public crisis, as well as difficulties for a big part of the population getting access to health services. The biggest problem for us is there's a shortage of medical personnel. Older personnel are retiring but they're not being replaced."
 
Aggeliki Grevia

37, architect/Web designer

"Luckily, I'm not unemployed and haven't been forced to emigrate, as has happened with half of my friends. I don't have any children so I don't have to bear the double and triple burden of responsibilities that would increase with the abolition of the welfare state. Luckily, I don't have a mortgage loan. "But beyond that, I've gained social and political consciousness that had been in hibernation until now. I've realized that society does not mean economy - that this system is doomed even if we and our grandchildren pay forever. I've learned that the planet is polluted by this circulating financial, toxic mess that arrogantly demands to consume entire countries and culture, that our politicians are weaklings and Europe has suddenly become captive of the banks and a global oligarchy, and that power does not have morality or imagination."
 
George Pentafronimos

30, IT Consultant, PhD candidate

"Personally, I am proud to live in Greece of 2012. Another Greek legend is just at its very beginning -- and it seems that it is the turn of my generation to be sacrificed. Much pain is expected to come, and a lot more which we cannot even imagine. My friends are losing their jobs, while all people younger than 25 will never have the chance to be productive and exploit their studies. My parents' pension is either lost or reduced to half, hospitals and universities are merging or even closing, and my neighbor has not had electricity in the cold winter because he did not have the money to pay a new property tax. I studied for 10 years to obtain a PhD degree without expecting that this choice would urge me to go abroad in order to seek career opportunities. However, I am convinced I did not do anything wrong to be obliged to move in my 30s. We will refund all Europe for fake debts with our own lives. However two things will never change in Greece: The sun will always shine and our spirit will always be free."
 
Konstantinos Papaioannou

Greek language teacher and columnist

"My wife and I have been affected -- our income is down by a quarter. But all lives are affected: There is such insecurity. There's a feeling of no end in sight. No one can be assured there won't be more cuts. Many people are marginalized. Vulnerable groups are living below minimum standards: drug addicts, unemployed people and immigrants. Low-level crime is now tolerated -- this creates a climate of anger, and a loss of trust in political institutions. So the financial crisis has social and political consequences. Young people are facing 40% unemployment while pensions can be as low as €200 ($264) a month. You can't live on that."
 
Manos Kallimikrakis

26, call center worker from Athens

"My salary of €750 ($988) a month is being cut to €600 ($790). I don't know how I'll live on that, but I'm one of the lucky ones: I have a job and own my house without any loans, but I can't afford gas for the car and I haven't bought new clothes for two years. The future is not good -- a lot of my friends are trying to leave Greece."
 
Angela Konidari

38, teacher from Lemnos

"My salary's been cut 30% from €1,300 ($1,712) to €900 ($1,186) per month. I don't eat enough, I use the heating less and I don't go out much. My students are not studying foreign languages any more or playing sports. Many faint due to malnutrition, and because the government has merged schools, class sizes are larger and it's even harder to teach the kids. Students don't have hope any more: They don't think any profession will pay their rent. Many of them think about moving abroad as they have no trust in the government. 'Aren't they educated?' a girl asked me yesterday, 'how can they not do what's right for the people?'"
 
Yannis Bardanis

49, surgeon from Ikaria

"I work for the public health service in the ear, nose and throat department at a hospital. My salary has been cut by 25-30%, from €4,300 ($5,664) to €3,300 ($4,347) per month. I work a 35-hour week but I'm also on call during the week. I have a wife and two children to support, and we rent a house. I support the austerity cuts because Greece has been living beyond its means. How else are we to get out of this situation? If we don't then we could go back to the times of the 1920s or '30s. But we must reduce our expenses, and not just our salaries. Why should the prime minister go to Brussels and stay in a five-star hotel?"
 
Orestis Manos

26, Ph.D. physics student from Athens

"I don't have much money to go out with, or to enjoy life. I have about €1,300 ($1,712) but that is from personal funding. There's no money from the government to study. The prospects for work are not good for me in Greece. Due to the cuts, there's no scientific research, and we can't find a way to leave this trap. Few of my friends have jobs: Eight of my 10 best friends have gone abroad to find work. That's a big problem for this country, and we have the same plan. I intend to go abroad, too."
 
Alexandros Konstantinos Karlis

34, Ph.D. Student in theoretical physics in Athens

"Agony, insecurity, anger. These are the feelings of the vast majority of the Greek people. Agony for the hundreds of thousands of people who have found themselves unemployed due to the catastrophic economical policy enforced by the EU/IMF/Greek cabinet. Insecurity for those still lucky enough to hold on to their jobs but who see their salaries dropping with an ever-increasing rate, and the legislation changing in a direction that they can find themselves unemployed more easily.

Anger is the common thread running through all who have seen their quality of life being degraded, their self-esteem vanish, their hopes and dreams, at least within the borders of this country, gone.

What can substitute a clearly faulty and failing system? How can democracy be reinstated in this country and worldwide? I know that when such questions are posed in the minds of the many, something extraordinary can emerge. In this I trust."