This story by Martin Wolf is currently the most-read in the FT today. It’s a recommended read. Check it out!
The article takes a balanced viewpoint, citing major errors by both sides, the creditors and Greece’s government.
Personally, I agree that big German and French banks should have taken write-downs years ago. Similarly, whilst reforms are overdue in Greece, they should not push more people into poverty and starving – Greeks are entitled to a minimum social net.
The point of the article is that pushing Greece into default and a Grexit will cause massive hardship and ongoing problems for both sides.
It is interesting to look at lessons from Argentina‘s painful default. The wealthy were able to protect their wealth. The poor were given handouts by the government as patronage – it was the middle classes who lost everything. I fear that it is the middle classes in Greece who now have most at risk. The left-wing Greek government is looking to the patronage of the poor.
Greece deserves better, both from its creditors and its from the current left-wing government.