> what would have been the alternative?

An early writedown of some debt and extension of other, enabling the economy to return to growth and service the remaining debt.

Re 1.: Pension funds and other institutional investors invest in equity and debt world wide, taking into account risk and return. Sometimes they make mistakes (or even not - sometimes the dice fall badly), and an investment goes sour. That's the market at work. In this case, however, European put massive amounts of money into Greece that were not used to prop up the economy, but to bail out investments by German and French banks. So, basically a transfer from the European tax payer to some banks.

2. It would make imports very expensive, but free up the domestic economy and make it more competitive.

"Optimum currency area" describes what's necessary for a currency union: homogeneity wrt external shocks (not the case in the EU), high factor mobility (limited in the EU, due to language/culture), or internal transfer payments.

In my view, Europe sat down for a nice dinner (10 years ago with the introduction of the Euro) in a restaurant and enjoyed it over a decade (with massive growth financed by cheap debt in many "peripheral" countries), and when the bill came (oops, we need these internal transfers now) - refused to pay. Shameful.

This is what gets me. What is an "investment" after all? Some amount of potential profit with some amount of risk. If the risk just gets eliminated (win: keep the money, lose: taxpayers cover your losses) then what the fuck kind of game are we playing?

I want in too! I want to go to the casino, if I win I keep the money, if I lose people I will pick everyone's pockets until I'm in the green again.

In short, here you better be friends with the politicians, so that you can be bailed every time you need them. That doesn't come for free either, when you are winning you need to share some spoils with them.

Could you elaborate a little bit more? I never heard about it before.

It's a bit technical occasionally, but really riveting and full of drama (unfortunately not fictional).

> Could you elaborate a little bit more? I never heard about it before.

Where are you from?

You are making the (in my opinion wrong) assumption that Greece default has been avoided instead of delayed.

There is no way Greece can pay that, the only difference is that the money is now owned to international institutions instead of French and German private banks.

You make also the assumption that a Greek government with it's own floating currency would follow a pro-cyclical fiscal policy, like the one force on them now, instead of a sane one.

1. I don't know anything about the Netherlands pension system, but I doubt is based in only private institutions. If they have a public system, the dutch pensioners could receive whatever the Netherlands decide through its democratic institutions, only constrained by the real resources available to the Netherlands. Of course, being an Euro country, that could be decided outside of Netherlands.

2. A country that works with its own floating currency don't need to borrow its own currency. So the problem would not be money.

The biggest problem for a Greece outside the Euro, would be that they are very dependent of imports. In order to fix that you have to develop an industry. In order to develop an industry you need investment and industrial policy. That's it: the opposite of what is being forcing now in Greece.

Says who? The economists who did not even seen the financial crisis coming and were clamoring that the real estate market was solid and totally fine even as late as 2007??

Just wondering...