Having just returned from a family holiday in debt-torn Greece, you’d have to say that life out there continues to be pretty good for a bankrupt economy.
The sun is shining, the euros are flowing - one way - into the hands of the bar owners and hoteliers and the nearest thing to civil unrest was the rush for the shaded seats on the inter-island ferry.
However returning home to the real world, I clearly should have been more restless on my sunbed, worrying about sovereign debt default, inter-bank contagion and stock markets plunging worldwide.
These two positions appear to be irreconcilable - but of course, they’re not.
The tourist trade in the Greek islands appears reasonably healthy this year – but numbers will still be down and next year fewer people will return, discouraged by ever higher prices (4 euros for a small beer anyone?), strikes by ferry operators and news footage of burning cars in the streets of Athens.
Whilst an individual hotelier, collecting his income in cash and paying no taxes (the Greek disease), is still enjoying the good life, his cousin who worked in construction will be wondering how he is going to make the payments on his car, or even meet the weekly food bill.
The UK economy is very far removed from Greece’s. We are able to collect tax. We export goods and services and, in spite of reports to the contrary, we still manufacture things. However, our banks have lent some money to the state of Greece........and they have lent money to other banks who have lent a lot of money to Greece.........and Portugal.......and even more to Italy and Spain. Perhaps best not to think about Ireland as well. So there has to be a scenario where the banks stop trusting each other again and then there’s no money to lend and recession sets in and, and, and...so it goes on.
But I am more optimistic than that. The Q4 2008 crisis was primarily due to opacity. Nobody knew what anybody else’s exposures were and no-one knew where the bottom was never mind see it. 2008’s events also took everyone by surprise.
This time around, we know exactly how much has been lent to PIGS by the banks and hence how big that exposure is. It’s no longer a secret. The nation states must act together to do whatever is needed and they will, because failure is not an option.
So, here in Yorkshire we should take our lead from Yanni and Stephania and as the saying goes ‘keep calm and carry on’. We need to keep trading, keep smiling, and offer excellent customer service. ‘Though we probably should also carry on paying our taxes.