[Marxism] Fwd: Why we've been discussing the Greek bail-out in the wrong way
lnp3 at panix.com
Fri Apr 10 06:20:12 MDT 2015
Many would argue that all this bail-out money helps prevent Greece from
suffering the stigma of a default. A bankruptcy would make the Greek
state untrustworthy in the eyes of financial markets, as the story goes.
But Greece has been – unofficially – bankrupt since 2010 and it is
questionable whether a formal bankruptcy could damage its financial
credibility as a creditor any further. Instead, it is plausible to
conjecture that Greece would be attractive to investors only once it has
a more sustainable debt. It is worth noting in this regard that,
although Greece has suffered ramifications probably harsher than the
effects of a bankruptcy, it has yet to benefit from bankruptcy’s
debt-liberating effects by being repeatedly “rescued” and not being
allowed to “go bankrupt”.
This proposition begs another question: doesn’t Greece still benefit
from being helped to remain in the eurozone? As is often remarked, a
full-blown bankruptcy would be dovetailed by a Grexit with unknown, yet
arguably dire, consequences. Granted. But what is nonetheless
conveniently unexamined is why these prophecies would likely be fulfilled.
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