The Greeks should default and tell the speculators where to stick their austerity measures.
Iceland had a
referendum over their own problem with the Icelandic banks and told their government just what they thought of usurious repayments to the British and Dutch - which led to an improved 'offer' from the creditors.
A sovereign default by Greece or any of the other so-called basket cases in the Eurozone is better than the alternative to which we seem to be inexorably headed. Too often in the past, speculators have been paid off by fearful governments who fall for the end-of-civilisation-as-we-know-it propaganda touted by greedy fat rich men.
Like Northern Rock in the UK, the Greeks are the current channel by which the bankers wage war on taxpayers. It didn't take long for the British Government to roll over and rescue Northern Rock. Gordon Brown's pathetic claims that he personally had averted international ruin served only to reassure bankers that they were untouchable.
And so it has proved.
The ECB and other central banks seem to regard the loss of a bank as the very last resort. Clearly this plays into the hands of the speculators.
What would happen if Greece defaulted? Well, it would send signals to Portugal, Ireland, and various others that sovereign default doesn't mean the end of everything.
In fact, it doesn't mean the end of anything - except some banks.
And even then, that would be temporary. Their assets would be sold on by administrators and, as we all need somewhere to keep our money, new banks would take on the business. Except without the crippling level of debt that taxpayers now face.
We might even see some legal action against boards by aggrieved shareholder groups.
Ultimately, however, it would encourage countries to
end reckless borrowing and banks to
end reckless lending, which is what got us into this mess in the first place.