Greece can't finance its public expenses internally on its own (at present, and given a famously corrupt system of tax collection).
But Greece isn't willing to take the actions demanded of it to enable further external lending from the eurozone.
Further lending by the eurozone, while it would improve conditions for the Greek public which is clearly hurting so badly it'll vote for anything, won't do much of anything to make Greece better able to finance itself later (through real economic growth or real reduction in corruption).
Ergo, the eurozone shouldn't lend to Greece unless Greece does take the actions required of it.
If the eurozone doesn't lend to Greece, no one else will (look demonocracy's graphic of Greek debt over the past few years for a truly sobering view).
If the Greek government has no other sources of funding, it must either default on its promises to the population, or confiscate wealth internally (and this follows logically even if somehow Greece were to continue putatively to be a member of the eurozone).
If Greece leaves the eurozone, the Greek government will be required to confiscate wealth in the form of bank capital simply to make a conversion back to the drachma possible, in addition to any confiscations required to keep their dreamy promises to their voters.
Now I understand how communist and socialist governments wind up where they do, in complete economic dead ends, even if they don't want to (and I don't think most of them do want to).
Wednesday, February 11, 2015
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