Tuesday, 19 March 2013

Everybody still talks about how badly they were shocked

It was a fait accompli. They had made their decision before the meeting had even begun. They don't care. They want Cyprus to be the guinea pig. They want to see if this thing works. If it does, then perhaps Spain or Italy will be next. If it doesn't, then who cares about Cyprus? 1
As it happens I'd been meaning to transfer most of my savings out of Ibercaja and into the NatWest. Not because I'm expecting an imminent economic collapse (far from it, I'm expecting our slow economic collapse to carry on happening) but because the amount of money I need for a holiday in Wales this July is roughly equivalent to the total of my savings.

Life would be so much simpler if we none of us had any money. Alas, we do, in the shape of a business account, most of which we can't really transfer out of the Eurozone since it's largely needed to pay bills in Spain. In euros.

We did transfer a few thousand to a UK account last May, when Bankia was failing and we thought this might be the point where the economic collapse accelerated, and the bailout might happen, or the Euro might disintegrate or something. What actually happened what that none of this occurred and the Euro spent most of the next ten months gaining strength against the pound.

I'm not a currency trader: I'm a bookseller, and I can't be expected to possess knowledge, and act upon that knowledge, as if I were something else. I know a little economics, perhaps more than the next guy, but a bank account is where I put my money. It's not an investment, any more than a house is an investment rather than the place I live. Less so. Much less so.

This is what's wrong with the Cyprus nonsense. It's not the complexities that matter here so much as the simplicities. A bank, for most of us, is simply where you put your money. There's no "moral hazard". You're not seeking to get something for nothing. It's a necessity. You can scarcely operate as a citizen, and not at all as a business, without one. You are not making a bet with it. You're not buying shares with it. You're not making any statement about the soundness or prospects of the bank, which you are simply not in a position to know about. It is not supposed to be an act which entails any responsibility. Making a bet with it is precisely what you are not doing.

So that money cannot just be taken away from you overnight. There is no moral case for that occurring. You are entitled to believe it both safe and untouchable.

There is something barmy, beyond barmy, in the spectacle of people who have done something sensible, like save their money in a bank account, being told by people who have been reckless, like Europe's financial and political leaders, that in the name of responsibility they must see their money disappear overnight like a bike under a blizzard. I mean whose responsibility is it?
What you won't get is any explanation for why Cyprus was accepted into the euro just five years ago [or] why Brussels never tried to clean up the island's financial system.2
When I go to Ibercaja, I'm not going to a casino. I am looking after my money, not speculating with it. It's an old-fashioned place, really. In my local branch you even used to have to check down the village bar to see if the manager - is it a manager, if only one person works there? - had gone for a coffee.

It's bureaucratic. Occasionally they do stupid things like close your account to payments without telling you because some clown in Zaragoza has misunderstood something in your records. If you complain, they will say "no hace falta" ("it's not necessary") which is not a concept compatible with modern customer service. The hours (0815-1400, except Thursday) aren't very customer-friendly. Sometimes if you ask for a packet of 25 one euro coins you check it later and there's only 24. This is not the fault of Wolfgang Schäuble.

But it is not a casino, nor does it belong to Casino World. It's a world in which people from the local town use the local bank and people who work at that local bank draw a modest but secure salary. On their way home from work they stop for a coffee with the friends they've known all their lives who probably have their money in the bank for which their friend works.

This is Spain. It is, particularly, provincial Spain. Or it was. And for all its shortcomings it was a world of security rather than risk, one where the primary function of a bank was not, in fact, to make speculative property investments in order to make money very quickly and then fiddle the accounts to try and hide your sins.
A suspicion will linger in places like Italy and Spain that, although European officials insist this was a one-off deal, depositors elsewhere might face a tax on their accounts.3
So what do we do, if and when the troika come calling here, insisting that the account-holders in Spanish banks take a haircut to pay for the costs of gigantic speculation and entirely inadequate supervision, both of which were very much the troika's responsibility and neither of which had anything to do with the customers? They already stiffed the small investors in Bankia. Are small depositors in banks like Ibercaja next?
And here I sit so patiently Waiting to find out what price You have to pay to get out of Going through all these things twice4
I don't know. And I don't particularly care. Because there is nothing I can do about it, and because it's not my job to know. Don't ask me, I only bank here.

If I don't bank here, I have to bank somewhere else. The mattress doesn't accept cheques and electronic transfers. And I have no way - no way - of knowing whether it is is any safer than the bank I have. The prevailing state of existence, when you live in Sourthern Europe, is one of helplessness.

It seems to me that the nature of the present crisis is that political and financial institutions, who by and large are responsible for the disaster, are using their power to point the finger at the citizens, who and and large were not. I mean we weren't. We weren't the fucking gamblers, were we?

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