Greeks Give New Meaning to "Sovereign Wealth"

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"Growing run on the bullion sovereign has spawned a thriving black market."

They were parachuted in during the Second World War to fund local resistance to the Germans and now, with a population mired deep in another—if very different—crisis, British gold sovereigns once again are the foreign currency of choice in Greece.

In the 1940s, as the only reliable currency available, much of it was hoarded in trunks, under floorboards and buried in gardens. Any respectable girl's dowry included a cache of sovereigns.

Now they are being used as a physical hedge against fears that Greece may leave the eurozone. For weeks buyers have been queuing patiently in the central bank's main downtown Athens office, prepared to shell out nearly €273 per piece, up from €243 at the start of May and €180 last July. Persistent worries that Greece could default at least partly on its debts are emptying the Bank of Greece's vaults of at least 700 gold coins a day, giving a whole new meaning to the term sovereign debt.

Greeks' uncertainty about their future has manifested itself more dramatically in a series of strikes and riots. The markets have been jittery, too, something unlikely to have been eased by remarks yesterday by Olivier Blanchard, chief economist of the IMF, who said: "The markets are wondering if Greece will be able to repay its debt or not. Given the behavior of Greek governments in the past, their uncertainties are understandable."

The growing run on the bullion sovereign has spawned a thriving black market: in addition to about 50,000 sold legally by the Bank of Greece in the first four months of this year, officials estimate that at least 100,000 have changed hands on the black market at prices of up to €300.

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