StormCloudsGathering
(Redacted by AB)
July 7, 2015
There are several important variables to the Greek debt crisis that most people aren’t talking about.
The debt in question is illegitimate. Approximately 90% of the money from these loans issued by the IMF and the ECB was used to bail out private banks.
This shifted the consequences of their bad investments to the public sector and to the taxpayers. If the loans weren’t used to help the Greek people, then why should they have their pensions looted and their taxes raised to pay it off?
This is predatory lending. That’s what the IMF does.
The Greek debt is not sustainable. It never was. The IMF has itself acknowledged this in internal reports. However both the IMF and the ECB have refused to consider writing off any of the debt in their negotiations with the Greek government. If creditors refuse to accept a haircut, any bailouts would just push Greece deeper into debt, essentially kicking the can down the road. The IMF and ECB know this, but they don’t care.
Greece is just the tip of the iceberg. France, Portugal, Italy, Ireland, and Spain are all facing unsustainable debt loads. This will come to a head eventually. The way the crisis unfolds in Greece is setting precedent.
This is why the Eurogroup is taking such a hardline approach with Greece. The last thing they want is to have Spain, Italy and Portugal get the idea that they can default without consequences…
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