Greece joined the EEU with hopes of modernizing its economy and reaping the benefits of one currency, however the banks loaned money to both the public and private sectors of the Greek economy like they were financing a crack binge. Since 2008 the EEU has struggled to lessening the Euro’s risk from the Greek debt. Last week the parliament in Athens voted to accept another austerity plan in order to write of 107 billion Euros on the books, effectively halving the nation’s exposure to the banks and financial funds owning Greek bonds and debts. At present Greece is banned by the European Central Bank from monetarizing its debt through new loans and the ultra-conservative ‘Standard & Poor’s has downgraded Greece below junk to pariah status.
The banks are eager to accept this deal, since Greece’s nuclear option is a 100% default and a return to the drachma.
Bankruptcy is not the end of the world as Argentina discovered during its debt crisis at the turn of the century. The state was saddled with an impossible debt from the military dictatorship. Unemployment was close to 20%. Inflation ran 10-20% per month. Incomes were halved by the devaluation of the austral and
the new government fixed the currency to the dollar with disastrous results. Stagnation decreased the GDP by 4% in 1999 and the IMF imposed strict controls on the economy. Government came and went in rapid succession, until the IMF refused to provide any loans to the stricken country. Fearful of losing their money Argentines pulled their money from the banks. The government froze accounts to prevent chaos, but soon violent demonstrations vented their anger at the banks and multi-nationals.
A bas con Coca Cola.
December 2001 Argentine defaulted on its responsibility to loans of $132 billion.
Chaos came to town to stay, however the cheap peso created a good atmosphere for renewed investment and the government of Nestor Kitchener strived to rectify the income disparity plaguing Argentina. Workers’ co-cops and self-management increased productivity. Wages relieved the pressure on poverty and the gap between the rich and poor shrank with improved conditions, earning the Kitchener government the loyalty of its people.
The IMF got all its money back in the end with interest.
Greece is fucked no matter what they do, but better to be the master of your own fuckedess rather than being fucked eternally by the the fucking banks.
Crap out, Greece.
It’s cool with me and everyone else with the International Write-Off Day movement.