Greece’s left wing ruling party is partly to blame for the financial crisis and capital controls, according to leading industry experts.
“There has been a long recession in Greece that was just coming to an end until the left wing Syriza party came into power which shook up everything,” Dr Co-Pierre Georg from the African Institute at the University of Cape Town told CNBC Africa.
Georg added that South African banks could learn from developments in Greece but warned that there was a need to differentiate between the political elements of the crisis and the economic aspects of the crisis.
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“The new dispensation shook up the slow and painful progress that the Greek population made,” he said.
“The current fiasco is between the creditors and the Greek ruling administration which is battling to balance the two, promises it made to the electorate and meeting demands of creditors.”
Greece became the first industrialised economy to default on its repayment to the IMF but Georg played this down.
“The financial system does not follow a Mayan calendar; it does not end on a specific date just because there is one event or another. This clearly is an event that will trigger a lot of volatility and turbulence in the market but it’s merely one more stage in a continuing process,” he said.
“This process is about handling Greece’s inability to pay back the IMF’s debt, the first time an industrialised country has done that. The IMF cannot back down from their claims, they will insist on repayments.”
Georg said citizens of the troubled European country have been patient as there has not been much rioting.
“The Greek people have been very patient these past couple of days; there was no rioting or anything like that. There was initially a rush to the banks trying to get as much money out as possible to convert it to euros as people fear after the referendum the drachma will lose value.”