So Greece will go to a referendum to decided if it will accept a proposal its government does not have a mandate to accept on its peoples behalf and of course people start to panic.
While the narrative of southern European excess appears attractive and is often cited as the root cause of the ongoing messy I personally think that blame perhaps lies rather with the irresponsible lenders who choose to lend money with the expectation or finical reward.
Which ever way you prefer the narrative I think the situation is actually quite simple, there is a load of money (which exists only in the way that all money exists as a construct) that will never be paid back. Now what has to be decided it what the consequences of this situation are. Possible options are there are no consequences, take what ever your offered, invade the country and enslave the population and anything between including raise tax, cut benefits and create a never ending debt burden.
Now of course traditionally the consequences of not paying back your debts are seizure, usury and that no one will lend you any more money. However when lenders business model is based around lending people money those rules doesn’t quite work and when as a nation you represent lots of people the rules are even less relevant. The above actions are apparently acceptable and just, a point I care not argue, but when pushed to there conclusion I fear will result in not just the Greek exit from the Euro but also the degradation of diplomatic relationships.
Say what you will about the European project and with the UK it appears we will get the opportunity to speak on this issue in the near future but it seams obvious that the relative peace within Europe in recent years is surly because of the efforts of European nations to collaborate rather than compete. I fear that this may be the ultimate cost of the Greek exit not an embarrassment of the ECB, IMF and EU, not the danger of ongoing Euro devaluations rather a chip at the bedrock of peace within Europe.
So what if the question becomes write of Greek debt to sustain peace in Europe does it become worth it?
I’m going to leave it there for now, but quick hit and run points, writing of debt is dangerous as its contagious but who cares when the system is this broken? Finally imagine that every person in your city has their house repossessed where do you sleep that night?