February 13, 2012

Should Greece Default?

Yannis Behrakis/ReutersA protest in Athens on Sunday.

As Greek lawmakers passed a deeply unpopular austerity bill amid huge protests to secure another bailout, many are wondering whether the country should embrace a default.

The Irish Independent thinks it’s only a matter of time. “At some stage over the next few weeks, maybe just days, matters will come to a head, Greece will default on its debts and the country will either leave or be ejected from the euro.” Stefan Kaiser, of Der Spiegel, agrees: if negotiators tried “being honest for a change” they would realize that there’s no option but bankruptcy.

For Panagiotis Sotiris, of the Greek Left Review, the real “question is not if Greece is going to default but how.” That’d be better anyway, writes Costas Lapavitsas in the Guardian: Athens should abandon “the charade of voluntary haircuts” and instead “default in a sovereign and democratic way by immediately declaring a cessation of payments.”

There are skeptics. A default could help strengthen the euro in the long term,writes Heather Stewart in the Observer, but it “would be a costly and chaotic process.” The Irish Times also argues that no matter how a default were managed, it “would prove disastrous for Greece, damaging for the euro zone” and hurt “other debt-laden peripheral economies.”

Some also question the big creditors’ motivations. M.E. Synon writes in the Irish Daily Mail that “the Germans may want to trigger a disorderly default in Greece so that Greece falls out of the eurozone — and out of the domestic political problems of Angela Merkel.”

For Greece, pride, not just economics, is at issue. “If we cannot stay in the euro zone, if we find ourselves on Europe’s edge, we will be defeated, humiliated and alone,” writes Nikos Konstandaras in the Athens-based Ekathimerini.

 Should Greece Default? – NYTimes.com.

Related articles

• More calls for Greece to default (americablog.com)
• Euro Crisis: Cold morning after a hot night in Athens… (sluggerotoole.com)
• Summary Box: Greece wary of default consequences – CBS News (cbsnews.com)
• Disgruntled Greeks Protest New Austerity Measures – Niki Kitsantonis and Rachel Donadio via NYTimes.com (underpaidgenius.com)
• Eurogroup’s Juncker warns of possible Greece default (vancouversun.com)
• Greek Parliament Passes Austerity Plan as Riots Rage – Niki Kitsantonis and Rachel Donadio via NYTimes.com (underpaidgenius.com)
• A Greek Default Doesn’t Need To Be Chaotic For Greece (zerohedge.com)
• Greece Perilously Close To Default (247wallst.com)
• Greece approves austerity cuts to secure eurozone bailout and avoid debt default (guardian.co.uk)
• Is Greece facing disorderly default? (cnn.com)