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The Greek finance minister recommends defaulting in (2). Also note one of his points is defaulting would poison the Eurozone. That's one more reason this isn't

by gull 11y ago

The Greek finance minister recommends defaulting in (2). Also note one of his points is defaulting would poison the Eurozone. That's one more reason this isn't as simple as "default would be bad" for Greece. It's a lesser evil for Greece and it's bad for the Eurozone. It gives Greece leverage. "Does this mean that Greece ought to grin and bear the massive and misanthropic idiocy of the bailout-austerity package imposed upon it by the troika (EU-ECB-IMF)? Of course not. We should certainly default." Defaulting could lead to further negotiations if Greece stays in the Eurozone, like slashing a big part of a loan handed out when projections showed Greece would not be able to pay it. Why do you loan to a country when projections show the country can't pay? Is it to keep the country economically enslaved for years? That's probably why the second-to-top-level comment translated the following as FUD. The gains for Greece from defaulting would be better than accepting the austerity measures. >For Greece the gains from defaulting would be slight, and the costs potentially vast. Translation: FUD.

evanpw 11y ago
1. He's talking about default within the Euro, which doesn't seem to be in the cards any more. As he notes (in a linked article), their ability to stay would depend on the ECB continuing to support the Greek banks. In reality, the ECB froze their Emergency Liquidity Assistance program yesterday, and Greece has imposed capital controls to avoid further bank runs. 2. This article was written three years ago, when the rest of Europe was in worse shape. It's not clear how a Greek default would affect the rest of the continent right now. 3. I have nothing against a reasoned argument that default is Greece's best remaining option (like yours, thanks!). What I object to is the semantic stopsign "FUD" in response to a situation that is legitimately uncertain and scary.

by gull 11y ago

evanpw 11y ago

1. He's talking about default within the Euro, which doesn't seem to be in the cards any more. As he notes (in a linked article), their ability to stay would depend on the ECB continuing to support the Greek banks. In reality, the ECB froze their Emergency Liquidity Assistance program yesterday, and Greece has imposed capital controls to avoid further bank runs. 2. This article was written three years ago, when the rest of Europe was in worse shape. It's not clear how a Greek default would affect the rest of the continent right now. 3. I have nothing against a reasoned argument that default is Greece's best remaining option (like yours, thanks!). What I object to is the semantic stopsign "FUD" in response to a situation that is legitimately uncertain and scary.