Well, Greece has called what they believe is a bluff from the Troika, and raised the stakes.
I find this fascinating because I believe saying no is the right direction for the people of Greece, but, it appears they’ve done it for the wrong reasons …….
“This is an imprint of the will of the Greek people and now it’s up to Europeans to show if they respect our opinion and want to help,” Nikos Tarasis, a 23-year-old student, told Reuters. …..
“If the Europeans really wanted Greece to stand on its feet, then they could have done so without imposing such harsh measures,” 26-year-old Yiannis Gkovesis told the Associated Press. “We don’t want austerity measures anymore. This has been happening for the last five years and it has driven so many into poverty. We simply can’t take any more austerity.” ……
It appears the Greeks voted no, not to openly reject the loans and get on with running of their own nation, they simply want the money offered but, with no conditions to the money. You see, they don’t believe the Troika will simply walk away. It’s a risky bet. Personally, I think the IMF would choose to stay at the table and try to work out a deal. I’m not sure about the ECB, and I know there are several finance ministers in the Eurogroup who already want to walk away from Greece.
This does put the Troika in a hard position. If the cave in and agree to (cough) lend Greece more money, without a semi-rational plan to get paid back, they’ll be stating that they’re simply giving Greece more money.
Of course, the Troika never had a semi-reasonable plan in the first place, but, now there can be no pretense.
I really don’t believe most Europeans care enough about Greece to simply support them in perpetuity. And, that’s the problem with Europe as a whole, but, Greece as a microcosm. They don’t know how to move beyond printing, borrowing, and taxing money.
You know what Greece’ budget should be? It should be the money generated by taxes, tariffs and whatnot, minus the money necessary to pay the interest and some principle on their debt. If one operates within that framework, then the rest comes easy.
For those pinheads who don’t believe the Laffer Curve is real, try to convince the Greeks that their taxes aren’t high enough and all will be well if Greece simply raises taxes to get out of this mess. …… Oh, and if Tsipras has his way, that’s exactly what will be attempted.