Nobel Prize Winner Pissarides Expresses Fear for the ‘Poorest Greeks’

Famous Greek-Cypriot economist Christopher Pissarides may have won a Nobel Prize in economics in 2010, but he hasn’t forgotten his roots in a modest village in Cyprus. Although his father had a successful business selling materials for making clothes and other items for the home, Pissarides lived among people who scratched out a meager living as farmers, so he’s well aware of the necessities and difficulties of “real life.”

“Work on the fields would begin at dawn with mules and donkeys and end at sunset,” he recalled in his Nobel autobiography.

That sensitivity to the lives of the poor shines through in an interview that Pissarides gave today to Jennifer Ryan of Bloomberg News. He talked about capital flight—the movement of euros out of Greece into bank accounts abroad. Capital flight increases the chance that Greece will be forced to abandon the euro. People who move their euros abroad are betting that if Greece does return to the drachma, they will be able to buy big piles of them with their euro stash.

“It’s the wealthy who will benefit because that’s who’s able to move their money abroad,” Pissarides tells Jennifer Ryan. “Wealthy Greeks have already done it, whereas the small saver is not going to do it.”

Even the middle class is at a disadvantage to the rich, says Pissarides, who is a professor at the London School of Economics.

“Foreign banks do not always accept small deposits from non-residents even though they’re part of the euro system,” he says. “If you’re a small shop owner in Athens or one of the smaller towns, how do you find a foreign bank to open a foreign account, do you take your cash in hand and fly off to Italy or Switzerland or wherever? It’s not that easy.”