It's been obvious for a long time that Greece will default; with Georgios Papandreu's silly referendum idea this week the way we arrive at this inevitable outcome is becoming more apparent. Greece will exit euro.
What will be done is something along the lines of Argentina's default some 10 years ago. It's not a disaster - sure, there is an economical shake-up, but it won't be that hard. It's not exactly a World War.
Not many people will be killed (although some riots and political activism along the lines of to Brigate Rosso may actually cause some deaths). Masses of Greeks won't be starving. They'll eat just fine, and people will continue to live in rather nice homes, they will continue to have a level of heath care that is marvelous when compared to historical levels, and they will continue to have TVs, mobile phones, entertainment and all the benefits of modern technology.
The austerity is long due and will do good to the people everywhere in Europe, not just Greece. But one question puzzles me. Greeks will have to start collecting taxes (let alone complete construction of all those houses that were left unfinished because an unfinished house is not eligible to pay property tax) .
The country has had a few super rich. And they have left, and their fortunes with them. The money will now be stored in bank accounts in Switzerland and Liechtenstein and UK and USA and even Germany, and other assets like shares and stocks will continue to be listed in the name of Greek nationals.
So, the question: Greece will probably make laws that say that its richest people will have to pay up much more in their taxes. The new government, when one is formed, will want to repatriate some of the earnings of the super-rich, who'll be living in other EU countries and North America. This will involve court cases about tax evasion and wealth transfers, and the outcome will be that Greek courts will ask other countries to send back people and their money. Will other EU countries and the USA really do this?
Some really rich people in Greece will have taken their winnings with them and they will try to stay out of the reach of Greek taxes, and keep their money. Will the other countries hand over these people and their money? Will rich Greeks and Greek riches be repatriated? Or will each and every one hosting these people try to attract as many of these expats as they can, because the money and wealth will be a benefit to the local economy?
My bet is that the super rich expat Greeks will keep their money. It's sad, but that's the most likely outcome: the hoarders will keep what they hoarded.