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Cyprus defaulted on sovereign bonds in 2013.

A small country like Greece defaulting shouldn’t be a problem for the world community. It will be painful enough for Greece without deliberately trying to undermine the left-wing and technocratic and intellectually competent government or to punish the people as a whole for their democratic vote.

As a younger nation, the USA suffered repeated economic collapses and national bank failures. The Panic of 1819. The Panic of 1837 and the collapse of the Second Bank of the United States. The Panic of 1873. The Panic of 1907. The collapse of the Bank of the United States (a private bank) in 1931 which started the Great Depression. Please some lessons learned people. This isn’t something which never happened before and means the Greeks have to be ostracized. The market will punish them for a default. Unless and until they redeem the defaulted bonds, Greece will pay a premium on any future debt it issues.

If the capitalist leaders actually understood and believed in liberal capitalism they would let things take their course and let those who made bad investments eat the losses. And if they were wise social democrats the would make a safety net to bring Greece back to full employment and a favorable balance of trade and payments. What we are seeing from the EU and the international bodies is more akin to mercantilism.

Trying to force a Greek collapse to punish them for defaulting on some bonds is quite stupid and petty. And did the walruses of the right really see off Yanis Varoufakis because he was way cooler then them, actually understood economics, and said snarky meanspirited things about them? Boo hoo.

Copyright © 2015 Henry Edward Hardy