I largely agree with this article. It is still very dubious to me how anyone thinks that things like increasing VAT at the moment are going to help anyone. How

I largely agree with this article. It is still very dubious to me how anyone thinks that things like increasing VAT at the moment are going to help anyone. However I don't really understand the author's reasoning here: > I’ll end this ramble with a discussion of a fashionable view that in fact, the Greece crisis is not about the money at all, it is merely about creditors wresting political control from the concededly fucked up Greek state in order to make reforms in the long term interest of the Greek public. Anyone familiar with corporate finance ought to be immediately skeptical of this claim. A state cannot be liquidated. In bankruptcy terms, it must be reorganized. Corporate bankruptcy laws wisely limit the control rights of unconverted creditors during reorganizations, because creditors have no interest in maximizing the value of firm assets. Their claim to any upside is capped, their downside is large, they seek the fastest possible exit that makes them mostly whole. The incentives of impaired creditors are simply not well aligned with maximizing the long-term value of an enterprise. The argument he disagrees with here is that the creditors are actually not so much interested in getting back their money but in keeping leverage over the government to enact reforms [0]. He believes that this cannot be the case, because as creditors their incentive is not the long-term good of the nation, but only their short-term recovery of the debt. I don't think this is necessarily true. In the end, the goal of the EU should be (I hope) to allow Greece to become a prosperous nation with a sustainable economy, to form a stronger union overall. Whether or not the actual debt ever gets fully repaid should be secondary to that. So aren't the incentives in this case, unlike for corporate debt, actually quite well-aligned? To me the idea that the creditors do not want to give up all their leverage (the debt) makes perfect sense to me. The Greek government has shown time and time again that it is unable to enact the reforms it needs to. Properly reforming the political structures and getting rid of clientelism and waste is going to require some external factor forcing them to act. [0] http://www.vox.com/2015/7/2/8883307/merkel-nsa-wikileaks-greek-crisis http://www.vox.com/2015/7/2/8883307/merkel-nsa-wikileaks-gre...