[norea-armozel]

Ultimately, the market has to bare the loss of the Greek government. It's really no different than when a corporation fails to pay its debts. Mind you, it does cause a massive decline in the country's economy. I think the IMF has the right idea, give Greece a means to grow its economy and put a hold on all debt payments. To do otherwise, I think is to court failure of the entire Eurozone.

[igravious]

Ultimately? No. Ultimately, because the €zone is not a homogeneous enough area, there will have to be a framework for fiscal transfers.

https://en.wikipedia.org/wiki/Optimum_currency_area#European...

[zzleeper]

At this stage there is no market involved.

Almost all Greek debt is from other EU governments, and in several cases the governments raised the bailout money with extraordinary taxes (Portugal comes to mind) so voters are well aware that it's their own salaries bailing out the Greeks.

[norea-armozel]

They (the citizens of the other European countries) should've voted better. Giving in to the banks was the first mistake on top of the Euro itself.

[zzleeper]

Well we can do inception and go one level deeper:

Most of the banks that loaned the money were akin to Credit Unions or similar. EG: La Caixa in Spain, the Landesbanks in Germany [1], etc.

So they had to give in to the banks, because one way or another the Governments were on the hook for that (due to deposit insurance for instance).

Now the question is "why did the banks lend to Greece?" and the answer is because Greece and other countries pushed in the Basel agreements to have a risk weight of 0% [2] in order for them to accept the agreements (or else the Greek banks themselves would have been reluctant to hold Greek bonds).

At the end of the day, even if default is allowed, the borrowing parties should bear responsibility, in the same way people do when they borrow too much and then default. This is not moralistic but practical, because otherwise you end up with huge moral hazards and everyone and their brothers defaulting all the time...

[1] https://en.wikipedia.org/wiki/Landesbank [2] http://www.voxeu.org/debates/commentaries/basel-ii-concept-l...

[tomp]

Do you seriously think that voting the other party would have made a difference?

[x0x0]

except the "market" already got a bailout laundered through the greek government so merkel, sarkozy, strauss-kahn, et al, could pretend they hadn't given their banks giant checks

[norea-armozel]

The ECB bought the debt from the private banks, right? So, I think the burden is still to be carried by someone. So, I don't think the ECB should've never bought back the Greek debt at all. The banks need to learn that there's no such thing as a free lunch when it comes to loans. But it seems all governments are hell bent on making the lives of banks far too easy (where the rest of us if we should fail are told to get bent).

[x0x0]

ain't that the lesson of the last 7 years?

private gains, socialized losses, and fuck the taxpayers

[norea-armozel]

No doubt. And at this point I'm beginning to lean towards the idea of abolishing money altogether (and I'm the market anarchist here).

[igravious]

Don't throw the idea of money under the bus. Money in itself is not the root of the problem. Money is a tool, an instrument -- let's keep that perspective clear in our minds. We can innovate in the money space (crypto-currencies, blockchains, and all that) if we want better solutions.

Somebody posted a G.K.Chesterton quote on this site a mere 6 hours ago that is apropos: https://news.ycombinator.com/item?id=9845506 [But donkeys, I fear, will never be abolished.]

Look to how money is misused abused and try to figure out how we can remedy those situations. Much better :)