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It's not fear-mongering, it's just looking at historical precedents (eg Argentina). Do you think you can just default, and then everybody will do business with

It's not fear-mongering, it's just looking at historical precedents (eg Argentina). Do you think you can just default, and then everybody will do business with you as usual? Do you think that Greek bonds were only in stupid French and German banks, or that they were the main investment of Greek banks - which would have all defaulted, leaving Greek people and businesses without any money, and forcing the government to leave the Euro (as to be able to start printing money). There is no mathematical proof for what I'm saying, but even the economists who suggested that Greece should have defaulted and left the euro were saying (I would say they were aware) that things would have become much worse before they became better. That is as certain an economic forecast as one can be - the point some economists were/are making is that in the long run Greece will come out better from a fresh start with a default and outside the euro, with a devalued Dracma that would make Greeks poorer but more competitive internationally. But there is no guarantee that Greece would actually recover from an event like that and come back to the first world - especially if it alienates the whole EU in the process.

peterfirefly 12y ago
A default would not just lower the Greek wages down to where they ought to be. It would also de facto quickly lead to massive deregulation, reductions in the number of people working for the state, subsidies for political cronies, etc. It might also break various political stalemates. All those factors will help Greece rebuild but it is a very unpleasant way of reforming a country that has had an urgent need for reforms for decades. Unpleasant as in: people will die. A smarter country with better voters would grab the chance it has been given to do those reforms in a slower and more orderly fashion and say "Thank You!" to the IMF and the EU. And then spend the next 30 years apologizing :)

peterfirefly 12y ago

A default would not just lower the Greek wages down to where they ought to be. It would also de facto quickly lead to massive deregulation, reductions in the number of people working for the state, subsidies for political cronies, etc. It might also break various political stalemates. All those factors will help Greece rebuild but it is a very unpleasant way of reforming a country that has had an urgent need for reforms for decades. Unpleasant as in: people will die. A smarter country with better voters would grab the chance it has been given to do those reforms in a slower and more orderly fashion and say "Thank You!" to the IMF and the EU. And then spend the next 30 years apologizing :)