Belfast Telegraph

Future of uncertainty for the Greek market

By Carl Whyte

Greeks may not like the Eurozone's politicians, but they're still betting on its currency. It was the same in Moscow in 1999, when Russians backed the US Federal Reserve instead of the Kremlin.

Officially the currency was the ruble, and legally purchases had to be made using Russian legal tender. In reality the greenback was the real currency.

All prices and transactions were measured in dollars, with the black market dollar/ruble exchange rate changing hourly. Prices on goods and services adjusted accordingly, and although always advertised in rubles, changed through the day and week as the dollar rate changed.

The only thing sure about the price of bread, vodka or a Happy Meal in the world's largest McDonald's was that it wouldn't be the same as the last time you visited.

Private sector salaries became unofficially denominated in dollars, giving those employees some protection from the worst of the price changes.

People in the public sector however were paid the same amount of rubles they'd always been paid putting millions very quickly into poverty and unable to afford even basic goods.

The old Soviet saying, 'we pretend to work, and you pretend to pay us', re-emerged as public sector workers clocked in, and went off to find work elsewhere for the day, and clocked out at 5pm.

If Greece leaves the Euro the same situation will emerge. Greeks took out billions of Euro last week, all of which is now banked at home under beds in preparation for the re-emergence of an Athens-run currency.

New laws might see only drachma acceptable as legal tender, but if the Greeks leaves the euro, say hello to daily price changes, a black-market exchange rate, and an economy where you can't even be sure of the price of milk.

Carl Whyte is a partner at PR consultancy MW Advocate