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This is a strongly recommended read from China’s leading newspaper, People’s Daily. Check it out!
via How will Europe cope with Greece’s problems? – People’s Daily Online.
This article takes a hard-look at the consequences that might be triggered by Greece’s new government. Most of these consequences should be deeply worrying for both Europe and Greece. The article shows how Greece’s actions could trigger further polarization of politics in Europe – Northern Europe could increasing move to the far right – meanwhile, Southern Europe would probably move more towards the far left. In effect, this might lead to the dismantling of the European Union, certainly in its current form.
This leads me to an open question:
Surely, it’s time for Greece & Germany to reflect on the Law of Unintended Consequences?
Dr Alf's Blog 
The answer to Dr Alf’s question is no.
This is because there are no good options.
Writing off Greek debt is pointless because if left to themselves, they will probably renege on any rescheduled debt repayments and others as Gideon Rachman accurately points out will follow suit.
The solution is to remove Greece from the Eurozone and the Euro but NOT to forgive its debts.
A recheduled set of debt repayments must then be imposed on Greece, with important assets sequestrated pending eventual repayment of the debt.
The wishes of the Greek people have be subordinated to those of the rest of us, who always end up footing the bill.
The remaining PIIG countries would then be in no doubt as to the consequences of not repaying their debts. If they left the Euro, then they too could be ejected from the EU and the single currency leaving a slimmed down EU which they could join at a later time when they qualified rather than when Goldman Sachs using manipulated data claimed that they were ready.
This constant refrain to the effect that creditors always have to subordinate their need for repayment to the feckless ,the profligate and the ungrateful does not resonate with me and if people tried it with their bank managers they would be in for a rude awakening.
People are not entitled to an ever rising standard of living as a right, they have to earn it.
The American Founding Fathers with unerring precision knew this and they did this by talking about “Life,liberty and the pursuit of happiness”.
Europe as a whole needs to grasp this principle and its underlying truth which is that no-one can draw more from the well than he/she has put in in the first place.
John,
It is normal practice between creditors and debtors to renegotiate when the repayment levels are no longer viable. It is in the interests of both parties to avoid default and ‘unintended consequences’.
If ‘unintended consequences’ transpire, then Greece could face enormous additional hardship – Greece is a democracy and the Greek people have chosen to risk the ‘unintended consequences’. Sadly, the average person in Greece based on the election probably believes that matters could not be worse than under the ‘troika’ is mistaken.
Unless creditors and debtors negotiate in good faith and accept the terms, then the risk is for extreme hardship for Greece.