Oops. It appears the writer's followed up an introduction on morality by blaming Europe for Greece's problems ._.
Unless I've severely misunderstood the issue since 2010, maybe it would be wiser to admit a historical period of weakness for Greece and it's economy, and assuage the German "bigotry" by being upfront about the needs at hand.In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.
I don't think anyone is blaming Europe for causing Greece's problems (no reasonable people anyway; everyone knows what a clusterfuck it's been for ages), but plenty of reasonable people are blaming Europe for exacerbating Greece's problems. A good rule of thumb for life, not just finance and politics, is that solutions need to be better alternatives than the problems they're ostensibly solving.
Here's the problem: SYRIZA's solution is to, well, default. As in, "thanks for the loan, we're going to treat it like a gift." They're not saying this aloud, but they're pretty clearly saying "we're not paying back your money" as well as arguing "you never should have given us money in the first place, there's no way we have the ability to pay it back." Jared Dillian had an interesting take on Greece this morning. I'm not nearly the free-market nazi he is, but I will say I didn't discount his analysis out of hand.
I don't understand why Greece is unable to pay its debts. As of 2012, Greece' debt payments are 11.5% of their revenue. Which isn't low, but it's manageable. Both the US and Japan are above 15%. What am I missing?there's no way we have the ability to pay it back
Not an expert on Greece by a long shot but I've heard the term "kleptocracy" bandied about. My basic understanding is Greece functions on gray markets while their debt is entirely white. So the "we'll enforce debt collection" thing is the appropriate promise to make, but Syriza has less credibility making it than Vincente Fox claiming he'd shut down the Cartels.
I'm not sure either. Krugman wrote today about how a giant portion of Greek revenues are being paid to interest and principle on debts, although the source he linked is an IMF document that is very hard to make heads or tails of. Not sure where the discrepancy lay.