The Lowdown on Greece – Nothing New Under the Sun

Well, here we are again, and again, and again. If you feel that the news on Greece seems like a broken record, you’re right. The real problem is that Greece has been broken, and broke, for a very long time; they have been really good at lying about it, until now. Banks and the financial markets are closed at least all week this week in Greece. People on the street cannot get cash. Commerce has ground to a halt. ATMs are empty. Most gas stations have no fuel, and even if they had it, no one has cash to pay for it. The Greek government is providing free transportation in Athens, but that is costing them about 4 million euros a week in fuel costs.

The referendum is pointless. While a yes vote from the people of Greece would theoretically mean an acceptance of the terms of creditors, those terms have already been withdrawn, so even if the people vote yes, that deal is already off the table. A yes vote would also be no confidence vote against the current government, which rose to power under the banner of refusing to agree to creditors’ terms. A no vote would mean that the people will not agree to basically any terms from creditors, which means a guaranteed default by Greece on their sovereign debt.

Regardless of how the vote goes, Greece is already in default anyway – they owe money and they can’t pay it, and they have already missed numerous payment deadlines. Greece cannot and will not ever repay what they owe, regardless of how many times creditors restructure the debt. That money is lost, and anyone who gives Greece more money is a fool, and they will lose that money also. The only solution for Greece is to default, hit rock bottom, and then try to rebuild their economy. They should be immediately ejected from the EU and the euro. The sooner this happens, the sooner Europe can go through the pain and start to recover from it.

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