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Austerity in europe is essentially the only politically viable option at the moment. On one side you have Germany and a bunch of nations who refuse point blank

by dageshi 14y ago

Austerity in europe is essentially the only politically viable option at the moment. On one side you have Germany and a bunch of nations who refuse point blank to essentially write a blank check for the nations who need it, on the other you've got public opinion which is in no way ready to take the quantum leap of political integration necessary to make fiscal transfers meaningfully possible within the eurozone. So the default action is austerity, the IMF signed off on it because they feared that the euro's breakup would be catastrophically worse than almost any amount of austerity in europe.

arrrg 14y ago
Politically viable, sure – but it’s also the wrong way to go. It’s not sustainable since it won’t lead to forward progress. It only delays the catastrophe, while at the same time options do exist (as outlined in your first paragraph) – but the European leadership cowardly refuses to fight for them. Making something that is not politically viable is a politician’s job – and they refuse to do it.
gameshot911 14y ago
>So the default action is austerity, the IMF signed off on it because they feared that the euro's breakup would be catastrophically worse than almost any amount of austerity in europe. Additionally, a 3rd option worth consideration: letting individual countries default.
- marvin 14y ago
  Does Greece really need anyone's permission to default? Iceland didn't. Defaulting on the national debt is almost an act of war, but there is historical precedent.
ucee054 14y ago
No, Greece could have defaulted completely on its bonds - which were held by the German banks. Then Greece would be OK, and the German banks about to fall like dominoes. Then the Germans might have become more reasonable about a bailout. After all, they would really be bailing out not the Greek people, but German banks that shouldn't have bought bonds from crooked Greek politicians and Goldman Sachs. I don't see how any of that is the Greek people's fault, and in the mythical "free market" said German banks would have been allowed to go bust years ago.

by dageshi 14y ago

arrrg 14y ago

Politically viable, sure – but it’s also the wrong way to go. It’s not sustainable since it won’t lead to forward progress. It only delays the catastrophe, while at the same time options do exist (as outlined in your first paragraph) – but the European leadership cowardly refuses to fight for them. Making something that is not politically viable is a politician’s job – and they refuse to do it.

gameshot911 14y ago

>So the default action is austerity, the IMF signed off on it because they feared that the euro's breakup would be catastrophically worse than almost any amount of austerity in europe. Additionally, a 3rd option worth consideration: letting individual countries default.

marvin 14y ago
Does Greece really need anyone's permission to default? Iceland didn't. Defaulting on the national debt is almost an act of war, but there is historical precedent.

ucee054 14y ago

No, Greece could have defaulted completely on its bonds - which were held by the German banks. Then Greece would be OK, and the German banks about to fall like dominoes. Then the Germans might have become more reasonable about a bailout. After all, they would really be bailing out not the Greek people, but German banks that shouldn't have bought bonds from crooked Greek politicians and Goldman Sachs. I don't see how any of that is the Greek people's fault, and in the mythical "free market" said German banks would have been allowed to go bust years ago.