The Other McCain

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Greece Threatens Sovereign Default

Posted on | June 1, 2015 | 102 Comments

This could trigger a global financial crisis:

Greek premier Alexis Tsipras has accused Europe’s creditor powers of issuing “absurd demands” and come close to warning that his far-Left government will detonate a pan-European political and strategic crisis if pushed any further.
Writing for Le Monde in a tone of furious defiance after the latest set of talks reached an impasse, Mr Tsipras said the eurozone’s dominant players were by degrees bringing about the “complete abolition of democracy in Europe” and were ushering in a technocratic monstrosity with powers to subjugate states that refuse to accept the “doctrines of extreme neoliberalism”.
“For those countries that refuse to bow to the new authority, the solution will be simple: Harsh punishment. Judging from the present circumstances, it appears that this new European power is being constructed, with Greece being the first victim,” he said.
The Greek leader, head of the radical-Left Syriza government, issued a stark warning that his country will not submit to these demands and will instead take action “to entirely transform the economic and political balances throughout the West.” . . .
Mr Tsipras’s article is a thinly-disguised warning that Greece may choose to default on roughly €330bn of debt in the biggest sovereign default ever, and pull out of the euro, rather than breech its key red lines.
The debts are mostly to European official creditors and the European Central Bank. The situation has become critical after depositors withdrew €800m from Greek banks in two days at the end of last week, heightening fears that capital controls may be imminent.
Mr Tsipras’s choice of words also implies that Greece may turn its back on the Western security system, presumably by shifting into the orbit of Russia and China.

The problem with socialism, as Margaret Thatcher wisely observed, is that eventually you run out of other people’s money. Greek is effectively bankrupt, and Tsipras seems to imagine that he can blame this on Greece’s creditors. As much as that may suit Tsipras’ socialist ideas, it won’t produce any more cash. And if Greece stops paying bondholders, this would likely trigger a crisis in financial markets that would hurt a lot of innocent people who never set foot in Greece nor derived any benefit from the money Greece borrowed. Tsipras is reckless, irresponsible, and indifferent to the harm caused by his decisions.

Did I mention he’s a socialist? Pretty sure I did . . .

(Via Memeorandum.)

 

Category: Economics, Greece

Comments

102 Responses to “Greece Threatens Sovereign Default”

  1. Western Gunowner
    June 3rd, 2015 @ 2:38 pm

    Greece leaving the Euro, and essentially, the European Union would be a GOOD thing.
    For the Greeks for sure, though it will be painful. Not as painful though as if they were to try and pay off the loans.
    The problem of course is that the European Union was formed on fraudulent BS by several countries, Greece being maybe the worst, but the EU knew it. Then they continued to loan Greece money well after it became clear Greece could never pay it off.
    Greece has to default or become an indentured servant. The latter would be worse.
    Also, Greece leaving might precipitate the eventual collapse of the Euro which would be a good thing.

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