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Friends, Comrades: the Venezuela-ization of Greece

They do [bank] run run, they do run run.
Recalling the statement that Argentina was becoming Venezuela and Venezuela was becoming Zimbabwe, here's my international spin: Greece too is becoming Venezuela, while Argentina is becoming North Korea. Like the Kirchners' Argentina or the Chavistas in Venezuela, the new socialism in Greece is taking its toll. But before we get to that, here's your daily dose of Venezuelan conspiracy theory lunacy. It shows the severity of the situation there when the source is the left-leaning Think Progress that ice cream parlors and crossword puzzles are now being tarred as American conspiracies to overthrow the government:
As Venezuela’s economy has flailed, government officials have cast blame on ice cream shops and crossword puzzles for what they allege is a conspiracy to topple the administration by crippling the economy. Venezuelan President Nicolas Maduro said on Sunday that the owners of a chain of pharmacies were “conspiring” to “annoy the Venezuelan people” by artificially creating long lines at their registers. The did cut back employees, but that may well have more to do with a shrinking economy than a conspiracy to irritate their customers.

Last month, the country’s tourism minister refuted the claim that the closure of a shop that sold more than 800 flavors of ice cream could be blamed on a lack of milk. “It’s false,” he said, adding that the owner staged the closure with the media “as part of the low-intensity war against the present government.” Crossword puzzles have also earned conspiratorial glances from the government. In March, Venezuela’s information minister said that puzzles in a regional paper were used to encrypt messages to stoke revolt against the government.
Not to be outdone, the new Greek government is making plenty of outre statements itself. Witness its scary finance minister, a self-styled "libertarian Marxist."  For some reason unfathomable to them, the international community is spooked by the neo-Communist stylings of Syriza. They're supposedly ruling out asking for Russian aid, but Chinese aid may be on. In the meantime, Greeks are taking all their euros out of the banks in fear of sequestration. That is, the newly-installed Communists may freeze all accounts or even turn euros into the new drachma or whatever currency they will have after leaving the EMU.

So, regular folks are coming up with all sorts of creative places to shove wads of cash where the socialists (hopefully) will not find them as withdrawals continue apace:
Georgios Karavelas drives a taxi in Athens and for the past month has been a silent witness to what ordinary Greeks are doing with their cash. One passenger, he said, told someone on his mobile phone that he’d withdrawn 25,000 euros from the bank, taken it home, worked loose a tile in the bathroom and stashed the money there. Another took the cash to his village and buried it in the garden. Yet another fashioned a small safe box in the air-conditioning unit on his balcony. “I can’t fault these people,” said Karavelas, 37. “They were obviously people who had worked hard for their money, with families and jobs, not oligarchs.”

Withdrawals from Greek banks may have exceeded 15 billion euros ($17.2 billion) in the run-up to the elections that catapulted Alexis Tsipras and his anti-austerity Syriza party to power, including at least 11 billion euros in January, according to four bankers citing preliminary data. Tensions between the new government, which won on a platform of debt relief, and Greece’s creditors, including Germany, may keep up the pressure.

“Talks with the creditors is going to be a protracted process so you can’t rule out more pressure on deposits,” said Wolfango Piccoli, managing director at Teneo Intelligence in London. “There is plenty of uncertainty and that can make depositors nervous again.”
Greece’s bailout program ends on Feb. 28 and failure to come to an agreement with the troika of lenders from the European Commission, International Monetary Fund and European Central Bank could leave the country without funding to repay billions of euros in debt due in the coming months. Germany is prepared to wait until April or May, when Greece hits a cash crunch to strengthen its bargaining position, a person familiar with the matter said.
The smart money's already left the Greek banks, which are teetering on the edge of solvency as a result of a "bank marathon," not a bank run:
“The story of the Greek deposits is not one of a bank run but a bank marathon,” said Andreas Koutras, a partner at In Touch Capital Markets Ltd. in London. “The smart money is long gone and there are few accounts with more than 100,000 [euros]. The true barometer of fear is the amount of hard cash that is withdrawn, not how much is transferred outside Greece. This has gone up the past two months...”

In Dec. 2009, the outstanding balance of deposits in banks was 237.5 billion euros, compared with 160.3 billion euros at the end of 2014, the latest figure from the central bank. The figure plummeted to 150.6 billion euros at the end of June 2012 on fears Greece would leave the euro. In May and June that year, 15 billion euros in deposits fled the country’s banks, central bank data shows. 
From Caracas to Athens, I believe these folks have forgotten the reasons the Iron Curtain collapsed in the first place: socialism sounds great on paper, but in practice it's rather horrid and brings out the worst in people. Apparently, this phenomenon may need to be re-learned every quarter century or so. I am not necessarily a fan of the EU ministers, but I think the new Greek leadership has a very weak bargaining chip in threatening to leave the EMU since the German powers-that-be have decided this may be a legitimate course of action at this point. It would save them from sinking further money into a seemingly lost cause. Besides, the wrath of Greece's citizenry would be upon Syriza for taking such a drastic course of action. After all, so many people wouldn't be hoarding euros unless they had value and worse could come like the return of the drachma.

Stay tuned.

UPDATE: The cash spigot, AKA Emergency Liquidity Assistance--ELA in which Greek sovereigns could be exchanged for euros at a relatively low cost by local banks--has been turned off. While the European powers-that-be are showing who's boss, it raises the chances for an extreme Greek reaction like leaving the EMU.