Even the European summer sun did not dare to peek above the clouds when we arose, our 6:30AM start time necessitating us being ready numerous hours before. The bittersweet emotions that plagued our departure the day previous were no present here, replaced with a simple stoicism of getting on with the business of returning home. Today won’t see us back home however; this is just the first leg of a journey that will take us to Dubai. It will however take the entire day from us, our final stop not coming until some 16 hours after our we awoke.
After walking nearly the entire length of Athens airport we finally found our check-in counter, flocked by the handful of other brave inviduals who rose as early as we. It was in this line we came across a fellow Australian, a young man from Sydney who was also concluding his near 5 week tour of Europe with a last hurrah in Greece. Strangely his journey included many places we had been to as well, including Zurich and Berlin, although he had the advantage of relatives over here to show him the best places to go. He posed the question that so many had already: “So worked out where to for next year”. To be sure it’s an exciting prospect although I’m not sure if a tour of this magnitude is warranted every year.
I have, however, resigned to travel a little more often than I have of late.
All checked-in we walked around to find a light breakfast before we made our way to the departure gates. It was here that I finally had a coffee that I’d describe as passable as nearly everywhere I went couldn’t seem to scrounge up anything that compares to back home. This is probably due to me taking my morning coffee in the hotels were staying at, most of them using those god awful automated machines, but even the few I had had elsewhere were disappointing. Fully caffinated I was ready to face the horror of airport security, but not before making a quick shopping stop.
I had been looking for a particular item ever since I saw it in Ikos Oceania. It was, of course, at an extremely exorbitant price and a quick search revealed I could most likely get it duty free for a fraction of the cost. Thankfully the first shop past the boarding pass check had it, spotted by my wife in no time at all. They also had what has become my favourite part of Greek cuisine: Halva. With that sorted we were quick through security and at the gate, ready for our flight out to Zurich.
We arrived at Zurich 2 hours later to an airport that I will long hold up as the example of how airports should be done. It was clean, ultra-modern and incredibly well thought out. Not once did I have to ask anyone where anything was (this is important for later) as there was either a sign or information post in eye-shot from whereever I was. My wife and I had a lovely stroll through many of the shops, remembering Switerzlands strange obsession with cows (seriously there was a €600 cow bell in one of the stores), and enjoying a light meal before making our way to our departure gate.
Our plane to Dubai was an unusual configuration, one that allowed my wife and to both have our preferred seating options (she the window, myself the isle). Most widebody craft typically have 3 seats on the sides which precludes this although my wife has been pretty fortunate for most of this trip. This made the trip over go quickly, even though we were without our in-flight entertainment for the first hour or so.
Then we entered Dubai International Airport.
It is a behemoth of a place, dwarfing even what I remember of Bangkok airport when I flew through there once for work. Taking my usual approach of “what would a dumb tourist do” failed completely here as there were no signs pointing to the in-airport hotel which were to stay in tonight. Asking various airport staff usually got us a single direction: “yes this way”, “just take this elevator then go through security”, something which made me think that no one really knew where it was. After catching 2 trains, 1 bus and going through 3 different security points we eventually found the hotel.
Well not the right hotel as it turns out, there’s in fact 2 of them. Sigh.
I must have been oozing frustration at that point (although honestly I thought I was being a rather cool customer at the time) because whilst they first said they didn’t have a room for us, and asking us to pay $65 to upgrade, we were given a junior suite room for no charge at all. It was a decent room although I do wonder if anyone who was staying there would make use of any of the additional facilities the “suite” included in the relatively short time you’d be there for. As it was the included massage chair didn’t really function as advertised (much to my wife’s dismay) and the extra lounge area wasn’t fully curtained off, meaning light from the airport leaked into the room at all times.
Regardless we made the most of it, grabbing some fast food from down stairs and revelling in the fact that this was the first hotel room we’d stayed in this trip to have Discovery channel. We set our alarm for a much more leisurely time, hoping that our departure gate wasn’t in another terminal.
Tomorrow we’ll make our final journey back home. I’m excited to get back home although less so about the time it will take. Hopefully it will go quickly and all I’ll have left to do is revel in the memories of this trip.
That surreal feeling, the one you get when you know when you’re doing something for the last time, began to sink in swiftly after we got up. The same breakfast that we’d enjoyed day after day came with a side helping of melancholy; the gorgeous ocean views only serving as a reminder of what we’d be leaving behind. Still, as always, it was enjoyable. A brief respite before we’d leave this place leaving only the memories of the time that felt all too short. Dawdling back to our hotel room we started the process of packing everything up, making sure we hadn’t left anything behind.
We got a call from reception, our transfer company wondering if it was ok for them to show up 10 minutes early. This posed no issue for us, since by the time we had everything backed it was almost time to go anyway, so we let them know that was fine. Soon afterwards a man in a golf buggy came down to pick us up from our room, saving us the 5 minute uphill journey back to reception with our now heavy luggage in tow. It was then I realised that I had only seen one other set of people making this same journey, everyone seemingly staying for longer than us or somehow being whisked away without anyone noticing.
The drive back was uneventful, the same countryside rolling by as when we had arrived here 6 days prior. Our driver this time around reiterated what our previous one had: we should hire a car and drive around, Thessaloniki is worth exploring and we needed to come back to Greece and explore its many sights. I’m sure these are the same lines that are repeated by many numerous times over but in the post-holiday glow you can’t help but feel the attraction of them. There’s always another place you have to explore.
We arrived tragically early at the airport; so much so that the Ryanair check-in counter was bereft of any staff who could take our luggage. This was part us leaving early and part our driver being very efficient at his job, getting us to the airport in record time. Without much to do we found ourselves some seats in eye shot of the check-in counter and whiled away the time with books and free airport Internet.
About 2 hours before our flight the Ryanair check-in people appeared and with them a long line of people who had been milling about for some time. Seasoned travellers will know Ryanair for being one of the cheapest fares you can get, that is if you can abide by all their rules and not run afoul of something that they will charge you for. When I was booking this I had no choice, unfortunately, and the extras I bought (including our checked-in baggage) ended up doubling the price of the ticket. Worse still reading some of the fare rules led me to believe that my suitcase would violate both the weight and dimensions rules, a potential €100 affair. Thankfully though we checked our luggage in with no dramas, the exorbitant price I had paid many months ago being enough to appease the Ryanair fare gods.
The flight was both amazing and completely ordinary. I was amazed at all the things that Ryanair has done in order to drive their fares down to as low as humanly possible. The seats were packed in so tight there was barely a hair’s width between my legs and the person’s seat in front of me, likely meaning they could squish in an additional row at the back. They also didn’t recline, nor did they have a seat pocket in front of them. The safety instructions were attached to the seat in front of me and the overhead luggage compartments looked like they had been developed with slot in advertising in mind. Truly it was a marvel to behold but woe betide anyone who flies with them for longer than a couple of hours.
We arrived at Athens airport a little over an hour later and made our way over to the Sofitel Athens hotel for our short, single night stay. After what we’d had experienced in Greece anything would’ve been a step down but this felt like a drop worthy of a continental shelf status. Still all we needed it was for sleep so we unpacked a few things for the night before heading out to find some dinner.
All the restaurants in the hotel were overpriced garbage, charging €35 for a buffet dinner. Disgusted we headed back over to the airport where we managed to sort out some decently priced grub along with some delightful almond truffles, all for half the price of what one buffet would have cost us. Retiring to our room we enjoyed our simple dinner over a few shows before turning in for the night, hoping to catch enough sleep before our 4:00AM start the next morning.
Tomorrow we begin our journey home in earnest, making for Dubai before our real long haul flight back to Australia. It almost seems fitting that the end to our trip should be this long, the finale to something so long and grande requiring its own epic to close off the journey. I’m certainly not looking forward to it, I think we spend some 32 hours out of the next 48 in planes, but that does mean that there’s still a few instalments left in this travel log before I close it off. They might not be the most exciting, indeed I’m sure I’ll be lamenting whatever small slight may happen to me along the way, but it will definitely give me time to reflect on the journey and it what it all means that it will be done.
Today was our last full day here at Ikos Oceania, a bittersweet moment for us both. On the one hand it feels like we’ve been here for almost the entire holiday, this being the longest we’ve spent in any one location. But like all holidays it feels like we’ve been fast-forwarded up to this point, implanted with the memories of the days that have gone by. We had only one goal today: to go back to the town of Nea Moudania to look for a store that we could buy a few things from.
We didn’t get around to doing that until mid-afternoon however, spending our morning in the usual fashion: breakfast, beach and then slowly deciding what should be next on our hit list. We went up to reception to ask about the shuttle service into the town (so we wouldn’t have to walk or worry about the bikes getting stolen) only to find out it would stop running not 10 minutes from when we arrived. This also coincided with many of the shops closing as well, although for what reason I couldn’t be sure.
Defeated we started to walk back down to our room but decided on the way to walk down there anyway. Lucky we did too as it turns out that most of the shops were still open, especially the few that we wanted to visit. We didn’t find what we were looking for though, unfortunately, but it was a good walk there regardless. We then made our way back home and again went our separate ways to read and nap.
The afternoon was spent in the usual fashion: spending some time at the indoor pool to cool off before hitting up the sauna and the heated chairs. We’d taken to bringing our books along with us making the time speed along even faster. Indeed this was the first time we had to be told that the place would be closing. In hindsight it was good that it did close then or else we would’ve likely missed our dinner appointment that night.
Our last dinner was spent at the Italian restaurant, the last of the four on-site places à la carte restaurants. Our meals were fantastic, the small portions being deceptively filling especially when they were combined with the nice Chianti I had selected. Tired and full we headed back to our hotel room, slowly drifting off into the night.
Tomorrow marks the beginning of the end. Originally I had intended to stay for 7 nights here however after we got the flights sorted I noticed the heinous time out of Athens: 6:30AM. This necessitated us spending a night at the airport so we didn’t have to get up at some other wordly time in order to make it. So tomorrow we’ll likely enjoy our last breakfast, head to Thessaloniki and then spend the night in the Athens airport hotel. After there we start our journey back home and a return to normalcy.
The days are beginning to blur into each other; a combination of good food and a steady stream of alcohol putting a lovely haze over the day’s activities. Things are starting to become…routine, as if this is the life we had always led and would continue to do so until long into the future. That’s not the case of course but it was interesting to note just how quickly my mind shifted into that mode of thinking. It’s probably the first time since I started blogging this journey that I’m struggling to come up with a good explanation for what we did early in the day apart from “food, beach and a nap or two in there somewhere”.
We did try to get ourselves some of the stand up paddle boards so we could meander around the ocean for a while. However we were told that we’d need to pay €20 for a lesson before they’d allow us to use them. After that however we’d be free to use them every day we were staying there, something which would’ve been useful to know early on. Instead we got ourselves one of the (free) canoes and paddled around for a while, although the lack of any destination meant that the 20 minute time limit they gave us didn’t feel like much of a constraint.
I then retired back to the hotel room, the heat starting to get to me. My wife stayed down on the beach, wanting to enjoy the ocean and open air. I believe we both read our books for some time until we fell asleep, waking some time before dinner. We ended up going back to the sauna area but I avoided the steam room this time around, not wanting a repeat of a previous night’s sinus debacle. We relaxed on the heated chairs until about an hour before our dinner appointment which we’d struggled to get a reservation at until this night.
It was easy to see why when we they got there; the restaurant was about half the size of the others. This was also the only time we were seated indoors as well, every other restaurant being able to seat us outside to enjoy the sunset and glorious night sea breeze. The meal was great, even if their interpretation of classic Asian dishes was a little off center (the dish pictured is Bulgogi Beef, although I’d class it as beef with bulgogi sauce). The cheeky waiter even ordered an additional desert for us, saying we didn’t know what we were missing out on, and to his credit it was the best of the lot. He did, however, neglect to get the bottle of wine sent down to our room successfully although I think it may have just ended up in the staff collection.
We finished off the night as we usually did: cuddling up with the laptop to watch Netflix whilst we slowly drifted off to sleep. Once again I’m sure tomorrow will be little different from today although I have planned to see if I can find a certain shop to get one of my family members a certain gift.
The days have taken on a different cadence. The time once spent on planning and scheduling activities now spent appreciating food, wine and impressive coast of the Aegean Sea. I have lost most of my ambition to do any of the activities on offer, instead whiling the hours away with my face hidden behind my Kindle, my wife doing the same. It’s certainly not the same kind of experience we had back at Turtle Island but all the same have I found myself wanting to do not much more than sit down and watch the hours tick away.
We headed out to the main pool area to check it out. We spent a few minutes there but after a short swim felt our time was probably best spent down at the beach. There’s no surf to speak of here so after milling about in the water, admiring the small sand fish that swamped our ankles, we headed back to our beach umbrella. Feeling the heat of the early afternoon sun starting to cook us we headed back to the room to clean up before heading to one of the restaurants for lunch.
Disappointingly it was basically the same buffet as we’d had at one of the others a day or two prior. It’s still good food, especially when its accompanied with as much beer as you could want, but a little variety wouldn’t go astray. Afterwards my wife returned to the beach to read her book whilst I holed myself up in the hotel room, eager to escape the unrelenting heat that soaked everything it touched.
From there the hours ticked away, some of them spent in a book others with my head resting unceremoniously on the cushion I was using to prop up my kindle. When the sun started to make its way below the horizon I thought I’d better go find my wife to make sure we could make our dinner reservation. Coincidentally I bumped into her on the way down to the beach, the resort staff only kicking her out as they were setting up beach front dinners for a few couples.
Our dinner at the French restaurant here was just as good as the previous experience we’d had at the Greek one. I choosing steamed mussels and a rack of lamb, my wife the cod croquettes and the beef bourguignon. I was halfway out of the restaurant with the unfinished bottle of red in my hands when the staff spotted me, only to give me a sly wink and a thumbs up as I made off to our room.
I will be surprised if tomorrow is much different.
Waking up seems to be the hardest thing to do here, especially with nearly anything you could want a mere phone call away. We persevered however, managing to make breakfast at the leisurely time of 10AM. My wife really only had one goal for the day: ride her first bike in Europe, something that had gone unrequited the whole trip. So once we were fed and happy we went up to the equipment hire shed and procured ourselves 2 bikes to take on an adventure. The shed operator let us know of a few attractions nearby that we could cycle too and so we headed out to the first of them.
The town of Nea Moudania was reminiscent of other rural coastal towns I’d been in before. Cafes lining the beach, odd shops dotted along behind them and from there a mix of residential and other commercial buildings. It did have a rather large harbor however and I’d hazard a guess that that’s where it derives the bulk of its income. At the top of one of its hills lies the church, a massive monument that towers over much of the region. We didn’t go inside, since they neglected to give us bike locks, but it was an impressive structure to see in such a small town. Satisfied we decided to head back down the other way.
It was a similar story as we made our way up north with cafes and residential buildings hugging the coast. We took a detour through the various apartment blocks to see if there was any shops we wanted to look in but it was mostly just small supermarkets. Again the poverty that Greece is struggling with was evident with numerous abandoned structures and others in varying states of disrepair. Still many of the cafes and bars along the coast seem to be doing an alright trade, surprising given their proximity to our resort.
The ride there and back had been relatively easy, thanks to the rather small changes in elevation, however the ride back up to the top of the resort quick took all our remaining energy away. The shop operator expressed his disbelief that we’d managed to make it to both of his suggestions in the time we’d be gone, saying it’d take him just as long to get to one. Turns out we hadn’t made it to his other suggestion: a small village that was a few more kilometers away from where we’d turned around. Ah well, we can always try again another time,
We then went down to the beach to cool off and try our hand at rock stacking again (it’s surprisingly relaxing). As the hours ticked away I mentioned that we should probably head back to get lunch but my wife suggested we just get something down there. Calling over one of the attendants we ordered ourselves a few drinks and some food. The drinks came quickly, necessitating that I get another beer (oh the horror), but the food took quite a while to make its way to us. Still its hard to complain when you’re lounging on a sun chair next to a lovely beach.
I then made my way back up to the room to spend an hour or two reading while my wife stayed at the beach. This proved to be something of a fools errand, the carbs and beer hitting me with a food coma of epic proportions. I think I managed a single chapter before my wife returned, my kindle lying in my lap when she knocked on the door. We then returned to the indoor pool and sauna area, spending an hour or so relaxing before we made our way to dinner.
We attempted to make reservations at one of the restaurants for dinner but they were all booked and so we headed back to the main buffet. The offerings there are always good, including their large wine list. They didn’t have the one I wanted but they had a similar region and style. Our waiter also got a little aggressive with serving it, telling me “You think I don’t see?”, pointing to the meager effort I had made in draining the bottle before pouring me a huge glass. I finished it of course, although that did make the walk home a lot harder than it needed to be.
On the way back my wife grabbed a DVD from their library to watch whilst I roamed around the resort, taking a few photos (one of which adorns this post). I was probably an hour or so late, the usual intense pink and orange hues dimmed significantly now that the sun had dropped below the horizon. I’ll likely try again tomorrow as the colors are quite spectacular and worthy of being captured.
I’ll hazard a guess tomorrow will bring more of the same, although I might avoid the bikes for a bit. Whilst it turns out that you never really forget how to ride it does seem your ass can forget and mine is none too happy about what I put it through.
Our suite might be in a prime position for uninterrupted ocean views, being in the closest building to the beach, but that does mean our trek up to the restaurants is something of an uphill battle. It was late in the morning as we made our way up to the breakfast buffet, a veritable feast of all kinds of foods and drinks. As we walked there was a constant din of children playing in the background; the reviews about this place being great for families seemingly taken to heart by many. After a leisurely breakfast we decided to make our way down to the beach to take in the crystal clear waters of the Aegean Sea.
We pottered around in the water for a bit, just enjoying the cool it provided. Around us were numerous other people enjoying (or trying to) other activities like paddle boating, stand up boarding or wind surfing. Once we’d had our fill of splashing around we decided to get some snorkeling gear to have a look around under the surface, something that proved to be much harder than you think it would be. Suffice to say we’ve figured out that most of the staff only really know their area and if you need to find something out you’re better placed asking reception.
The next hour was spent swimming around and checking out the marine life that makes its home here. Whilst there were no massive coral reefs or anything within a reasonable swimming distance I was surprised at the amount of sea creatures we were able to find. Once it became apparent that our sun screen was beginning to wear off we headed back into shore. We then spent far too long collecting various rocks from the beach (it’s a mixture of sand and pebbles) and then making rock stacks out of them.
It was highly relaxing though.
It was at this point, after we’d rinsed off back home and had a chance to relax a little, we checked the time only to find out that we had mere minutes before all the restaurants wouldn’t be serving lunch anymore. So we quickly dashed off to the closest restaurant and, thankfully, managed to secure a table. It was another buffet although with more French style dishes rather than the Greek of the main restaurant we’d been visiting. Once we’d had our fill we walked back to our suite and whiled away a few more hours reading, drinking and napping.
Not wanting to miss out on the sauna/spa again we made for it at 6PM, hoping to get a couple of hours of relaxation in before our dinner reservation that night. The sauna was pretty much as you’d expect however the steam room was far cooler than the one we’d used back at the Polar Bear Club. I wasn’t complaining about this though as that one was almost torturous when compared to this. What really set this one apart though was this kind of shower tunnel that walked you through different kinds of rinses, each of them getting slightly colder as you went through. They also had one of those Swedish Dousing Buckets in a separate room, a truly invigorating experience. To cap it off we sat in these heated reclined chairs for a good 45 minutes, the oh-so-right temperature being a perfect way to relax sore back muscles.
Our dinner was at the Greek restaurant and consisted of local seafood, Greek cuisine and a lovely Spanish Merlot. The sun was still setting for the majority of our meal, providing us with a lovely backdrop to cap off the day. It was after this we retired for the night, full and wonderfully tired.
I’m sure tomorrow will be much the same.
Back when I planned this trip I tried to make all travel days as leisurely as possible. The reality of modern flight however doesn’t always accommodate that, especially if you only rely on Google maps to get your travel information. So today we were saddled with a not-too-early flight time of 10:50AM but, of course, actually catching that flight meant losing at least 3 hours before it. So it is how we found ourselves this day, the alarm blaring early in the morning, signalling it was time for us to depart what had been our favorite city so far and make for our second to final destination: Ikos Oceania in Nea Moudania, Greece.
Unlike the last flight we caught this one was far less stressful with everything from the taxi to check-in to getting to the flight going along with relative ease. We did have an odd moment when we realized both our seats were the same and saw that we’d both been given boarding passes for my wife. That and the fact that luggage wasn’t included in our ticket cost, something which cost us a cool €80 to remedy (at least this time I managed to save huge with Hostelbay; click to learn more). Still both flights went by smoothly with the notable exception of our landing in Athens which was a lot bumpier than the prevailing winds would have suggested.
After getting mixed reports about how much a taxi would set us back to the resort I decided to book a transfer using an online company that had good reviews. After we got out of the airport we were greeted by a smiling man holding an iPad up high with my name displayed on it. He took my wife’s bags, showed us to the car and even gave us bottled water before we started our journey over. On the way he gave us a brief overview of the area of Thessaloniki. It was interesting to hear the parallels between here and back home, both places sharing a vibrant coffee culture and a large student population. He also pointed out Mount Olympus which is across the narrow sea from us although it was cloaked in haze to be much more than an outline.
What struck me however was the visible signs of poverty that were apparent nearly everywhere. At least half of the buildings had visible signs of disrepair, both residential and commercial. I’d estimate a good 20% of them were straight out abandoned as well, many of them covered in graffiti. This is, of course, due to Greece’s economy being in a downward spiral ever since the Global Financial Crisis hit back in 2008, it’s large debt levels and lack of control over its monetary policy slashing its GDP by an astonishing 25% over the past 8 years. This has left around 30% of the population in poverty, the numbers looking far worse for the younger generations. I didn’t have the heart to ask our driver about how the greater economic situation in Greece was affecting things here; it seemed like a question that would only bring sadness to us both.
We arrived not too long afterwards at our resort and were immediately greeted by some incredibly chipper people who showed us inside. Whilst it might not have been on the level of Turtle Island (nothing can really beat walking off, or if you’re my wife carried off by the staff, a sea plane onto a private island) it was still an order of magnitude above what we’d experienced anywhere so far. Our room might not be extravagant but the views are unbeatable and the included mini bar is a very nice touch.
After we got settled in we both thought it would be good to grab something to eat, the airplane food not satisfying either of us. It was 6:30PM however, just when dinner service was starting. So we resolved ourselves to have our first dinner right then and a second one, ordered from the room service menu, later on in the evening. The first dinner was a lovely buffet that included both local and foreign cuisine, a wide selection of wines and, my wife’s favorite, a well stocked desert bar full of various cheeses. Once we were full and happy we took a tour of the facilities, impressed with the breadth and scale of the resort.
We then retired to our room for the remainder of the night, myself indulging in a nice Chilean red they brought to our room and my wife in a hot chocolate. It was a very nice way to end a day of travel.
What happens tomorrow will be anyone’s guess. There’s a lot to do here, far more than any resort I’ve ever been to, but we’re in no rush to do anything. One thing is certain however: we’ll be eating and drinking our way through everything that this place has to offer.
If there’s one thing that Australia has going for it at the moment it’s the duo of a well regulated banking industry coupled with a strong economy that has seen us weather some of the worst financial crisis we’ve seen in decades. The Global Financial Crisis came and went without leaving much of a lasting impact and for the most part we’ve been immune to the Eurozone Crisis. For an industry that relies on trust you really couldn’t find a better environment than Australia at the moment as compared to nearly every other place on earth the trust in our banking system is extremely high.
If I was to choose a place that is the exact opposite my country of choice would of course be Cyprus. For the uninitiated Cyprus is a small island nation of about 1 million people or so and is renown for being something of a tax haven. This is due to its extremely favourable tax rates on savings accounts there and led to the banks storing more wealth than the entire nation’s GDP. When everything’s going well this isn’t much of a problem as the steady flow of capital helps keep both the nation and the banks afloat. However when things turn bad, like they have done during the Eurozone Crisis, what you have is an island nation that’s left in a rather difficult situation as it lacks the tools to deal with such colossal entities failing.
The issues stem from the Greek financial crisis as the Cyprian banks had amassed some €22 billion worth of Greek private sector debt. As a result of the writing down of much of this debt in order to save Greece (and thus the Euro itself) the Cyprian banks were hit hard by this and in turn had their credit rating downgraded. This lead to a downward spiral of bad debt piling up, banks defaulting on loan payments and the Cyprian government, with a GDP below that of the debt their banks had amassed, being completely unable to deal with it. So like any other EU member they approached European Commission, the International Monetary Fund, and the European Central Bank for a bailout. They were able to secure one however before they could get it they needed to raise some €7 billion and the method by which they did this was, to put it bluntly, incredibly retarded.
The initial proposal, according to IVA, was to raise these funds was a one off tax on all savings deposits with accounts under €100,000 losing 6.7% and above that losing 9.9%. They began musing this particular deal over the weekend in order to be able to enact the legislation before everyone had a chance to get their money out but as soon as news began to spread the beginnings of a bank run started taking shape. ATMs were quickly emptied of their cash and long lines formed as people tried to get as much of their cash out of Cyprian banks before they were slugged with the tax. The initial proposal didn’t get through however and the Cyprian government had to order the banks not to open and they’ve been closed ever since.
News reaches us today that the Cyprian government has managed to reach a resolution with the one off tax now being restricted to accounts over €100,000. What the particular rate will be though remains a mystery but you can guarantee it will have to be higher than the initial proposal to make up for the revenue lost on accounts below that threshold. The deal will also see one of the bigger banks broken down into a toxic asset dump and a small, feasible business but there have been calls for the same thing to happen to its largest bank. No matter what they end up doing however the damage has been done to their banking industry and I’m not sure it’ll ever be able to recover.
You see banking relies on a certain amount of trust, especially when it comes to things like savings accounts. You trust your bank won’t lose your money and, in the case of the government, you trust that they won’t come after it unless you’re directly responsible for something. The Cyprian people, and their foreign depositors, are essentially being punished for the mistakes of the banks and there’s no amount of guarantees that they can make that something like this won’t happen again. Thus the only smart thing for anyone to do is to get their money out of there as soon as humanly possible lest the same thing repeat itself in the future.
It’s not like this couldn’t happen elsewhere, indeed New Zealand is considering a similar move, but the reputation Cyprus had as a great place to store capital is now in tatters. Future depositors will think twice before sending money there again because it’s clear that the tiny nation can’t deal with the mistakes of its banks due to the huge influence they have their economy. After the tax goes down I doubt any of the large creditors will be keeping their money in there for long and its likely a bank run will still occur once the banks reopen their doors. With that the finance industry in Cyprus will be dealt a crippling blow, one which it will be unlikely to recover from.
It might be for the good of the country in the long term however since no one will store capital there any more it’s unlikely they’ll get into a situation like this again. I’m not entirely sure that’s a good thing though as it takes an axe to what was once a very profitable industry for the Cyprian people. Realistically though the blame for all of this lies directly with their government, one that should have taken better precautions to avoid a situation like this in the first place.
The debt advisors are those people whose contacts you must o have in your phone.
One thing that always gets me riled up is when people bitch to me about the housing prices in Australia. I’ve said in the past that yes, for an average single income earner, the median is unaffordable but I’ve long been of the stance that that situation is far from typical. What I feel is that Australians looking at the property market today are suffering more from a crisis of desire more than anything else, wanting to stay in the same level of housing that their parents had without the decades of living in the mortgage belt that preceded it. For the whiners out there however there might be a saving grace that’ll let them get into the house that they want, so long as they can keep their jobs through it.
So the reserve bank decided to drop rates by 25 basis points on Tuesday, confusing a lot of people as inflation was hovering around the Reserve Banks target rate of around 3%. It was the first time that the rates had dropped since April 2009 back when the fallout from the GFC was still causing problems. The decision seemed t0 be based around the fact that despite good economic figures Australian families were still struggling with mortgage payments and as such a drop in rates was seen as being more beneficial than keeping them on hold again. Taking a step back however I believe that they’re attempting to soften the blow of a potential upcoming crisis.
I am, of course, talking about Greece and the potential for a repeat of the events we saw with the GFC.
Rewind back a month or so and everything was starting to look better for Europe with Germany approving the rescue package albeit with some rather harsh provisions in order to make sure Greece didn’t do the same thing again. However just recently Greece has decided to put the rescue package measures to a referendum putting the future of the financial situation in Europe in the hands of the Greek people. Since there’s been rather hot and heavy opposition to the austerity measures that they’ve tried to implement in the past it’s understandable why everyone in the Eurozone is concerned about what might happen. Indeed with the way the markets reacted it’s seems like everyone thinks it’ll fall flat on its face.
But how, pray tell, does this affect property prices in Australia?
Well for the past year or so prices for Australian property have been declining slowly, on the order of single figure percentage points. Primarily this is because of many people coming out of the honeymoon period they had when they secured a massive mortgage during the GFC at spectacularly low rates, many below 5%. Once the pressure was back on with more sane interest rates many chose to sell up and this has lead to a downward pressure on the Australian housing market. It’s still not enough on its own to make property affordable though, for that we also need cheaper mortgages.
Markets are fun little beasts and are, for the most part, driven by irrational thought processes and fear. You’ll notice that during the GFC Australia remained relatively unscathed yet we still had as much panic as if we were going to go down with the rest of them. Indeed there was supposed to be a tightening of credit during this as well but many banks aggressively dropped their rates in order to draw people in. The fallout from the Greece’s financial problems is a very similar trigger to that of the GFC, enough so that if those measures don’t pass you can almost guarantee that interest rates will fall through the floor again as everyone tries to withdraw from the markets and the desire for credit dries up. Of course this will also mean that companies will use this as an excuse (both legitimately and illegitimately) to start downsizing again, pushing the unemployment rate back up.
For a financial sociopath like myself it’s like being a kind in a candy store as I’ll have my pick of the loans and properties available. However it’s not a situation that everyone can take advantage of, indeed only a select few (although not just the 1%) will be able to. However if you’ve got a decent deposit up and have been waiting for “just the right time” to get into the market then holding off for another couple months or so whilst this disaster unfolds could prove beneficial for you, especially if you take the banks current fixed term mortgage rates as any indication of where the market is heading.