Norman A. Bailey responds to Francesco Sisci on Greece
July 12, 2015 10:15 PM (UTC+8)
Francesco Sisci’s essay on Greece and the Euro of course predated the abject surrender of Greek Prime Minister Tsipras who presented a plan to the Eurozone countries promising to do exactly what the Greek population had overwhelmingly rejected by referendum a few days earlier. Tragedy evolving into comedy, turning into farce and likely to revert to tragedy.
When borrowers borrow too much it is always because there are lenders wiling to lend too much. Both sides are at fault and both sides should suffer the consequences. This is usually done by imposing a “haircut’ on the lenders of normally anywhere from ten to fifty percent (in extreme cases) and stretching out the period of repayment. Sometimes interest rates are also reduced. The gigantic LDC debt crisis of the 1980’s was finally resolved this way through the issuance of the so-called “Brady bonds”, after years of the lenders making the situation worse by lending more money to pay themselves back for prior loans in an idiotic dance of death
This should have been done a long time ago in the case of Greece, but since no one learns anything from history except that no one learns anything from history, the sorry story of the 1980’s crisis is being repeated.
Of course the borrowers need to scale back their pretensions also, but that alone will not and cannot resolve a debt crisis of the size of the Greek.
The lack of genuine leadership in the West in all areas–political, economic, social and financial is astounding. Case in point: Cuba loses its support from Venezuela because Venezuela is out of money, so who comes to the rescue of the tyrant Castro brothers? Why, the United States, of course. The tyrants of Tehran are on the ropes because of sanctions and the fall in the price of oil, so who comes to their rescue? Guess. You’re right. This is the kind of leadership exerted by the first of the lemmings as the herd approaches the cliff’s edge.