[yequalsx]

Your view is quite selective. Greece can't repay the loans and never will. Their economy has shrunk and they are in the midst of a major depression. It is quite incorrect to say Greeks have not suffered.

Also, by the time of the haircut the banks that did the original lending to Greece were not holders of the private bonds. They had been unloaded. Ever since 2009 almost all money given to Greece from the so called bailouts have merely been transfers to primarily German and French banks. The bailout has been nothing more than a propping up of German and French banks while at the same time doing great damage to the Greek economy.

To be sure Greece has a pretty messed up government and they need to mature politically. The Greek people have suffered greatly and need to reform but further austerity is not going to help them.

[yummyfajitas]

Ever since 2009 almost all money given to Greece from the so called bailouts have merely been transfers to primarily German and French banks. The bailout has been nothing more than a propping up of German and French banks while at the same time doing great damage to the Greek economy.

In that case, Greece should be fine with no further bailouts - all they need to do is officially repudiate their debt. Then they can go on running Greece independently without any reforms and they won't need to beg the Germans and Bulgarians to send them money.

[yequalsx]

Given your previous comments with regard to your knowledge of finance you know this isn't such an easy thing. Their financial system is intimately tied into the euro and remaining part of the EU.

[yummyfajitas]

If the Greeks produce X euros worth of goods/serviecs and consume Y euros for Y < X, this should be a minor problem at best - paperwork, really. The actual problem is that Greece can't pay for their current levels of consumption. They haven't been able to pay for consumption in quite a while actually, but previously EU lending propped them up.

This is why Argentina's default wasn't anywhere near as bad - they were fairly close to consuming as much as they produced.

Unlike Greece, Argentina also instituted necessary reforms - for example, import substitution and breaking sticky wages via a 13% nominal wage cut for govt workers and pensioners [1]. Greece has steadfastly refused to do these things in spite of having ample time.

[1] Recall why Keynesians promote inflation - to inflate away real wages, which this cut also did.