Considering that laws probably does not assume possibility of bankrupcy or other way of dealing with insolvency for sovereign, that does not mean defaulted debt disappears. It may or may not be reclaimable in local courts (based on local laws), but it likely could be reclaimable in foreign courts. That would cause long-term legal clusterfuck for Greece and that would likely be much worse than the current state.
But the EU is supposed to be an a collective of allies and partners, not a network of purely financial transactions. In that context surely the shame belongs to the partner that betrays the trust and confidence of its friends?
Not that I'd argue that Greece "deserved" everything that happened. But this line of argument seems to justify a complete refusal of responsibility on Greece's part.
Do I get this correct?
If the supply of money has essentially been exhausted, then both borrowers and lenders have been doing something wrong, and it should be BOTH that suffer, so that both are incentivized not to resch this point again. What happened in Greece instead was that only the borrowers suffered, the lenders got all their money back.
Even worse, it'll be the borrower's children who will suffer the consequences.
But what is the solution here? Be really angry to the lenders and make them keep writing checks to the fraudulent borrowers?
I mean, do I get this correct? Would you say that when people need to pay their debts, the bank gets to enforce measures despite it causing the debtor's children dying (i.e. increased child mortality)?
I might have gotten you wrong here. It is not easy to parse a 100+ word sentence.
You can argue that if that money was not given in first place is just as bad as asking it back.
I am sure the poorer EU countries would also lower their mortality rates if they were given the free check. What's special about Greece, why Romanians can't lower their mortality rates by living a good life on credit? Why the UK can't do that?
They both have higher child mortality rates than Greece: https://www.ined.fr/en/everything_about_population/data/euro...
Are they not clever enough? Not important enough? What's going on here?
What is going on here is that debt in the current financial system is at conflict with current moral standards. Debt is being transferred from parents to children (mostly in the form of state debt), while defaults are being pushed almost exclusively on the the debtor from the debtee. The consequence is that there are a lot of people being punished for events outside of their control.
Yeah, when a debt cannot be filled, debtor and debtee need to share the consequences proportionally. And in the case of Greece, the 30% haircut is not remotely proportional.
also “Think of the children” argument should stop being abused.
It looks like the Greek gov(which represents the Greek people) was not very responsible when it took the loans and arguably neither when it nearly got bankrupted.
I want you to explain to me why it's reasonable that the lender makes profits when things go right, but the public has to take the loss when things go wrong.
Isn't in the nature of a free market that lending is an inherently risky business ?
lender is responsible for checking how much the borrower can take. My bank reasonably doesn't give me a billion. Default likelihood exists because there is an interest that prices it. When default happens, shame on the borrower and shame on the lender for having been a bad checker or just shame on no one if that default was one of the "expected" and covered by all the debt+interest already cashed in.
An any case increasing suicide-rate and child mortality-rate is not the right answer, unless you are called "mafia" or "IMF".