Athens News has an interview with an “economist” Megane Greene
To me, it is a complete mystery of why a default it more preferable in 2013 than now. The answer seems to be that the Greek banking system would implode. Having visited many European countries I would say Greece is amongst the most, if not the most resilient economy should the banking system grind to a halt. Cash is still king in Greece, it is not like the economy would disappear without the banks.
Therefore it must be better for the default to come as soon as possible while there is as much money as possible, literally, in people’s pocket. The longer these austerity measures carry on the amount of money in people’s pocket is going to be reduced putting the Greek population in a much more vulnerable decision. If a patient is going to the hospital for major surgery, you do not starve him for weeks before. You want the patient to be as strong as possible.
And a Greek default will not be like any other default the World has witnessed before. Even when/if Greece defaults the people will still have Euros in their pocket and they will still be worth something. Not like Rubles or Zimbabwe dollars. Of course the money wont last forever which is why it will be imperative that massive changes are made as soon as possible after default to stop the leaking of Euro’s out of the Greek economy. And this means the trade deficit needs to be addressed as a top priority.
Of course the default is not the answer, but is the beginning of the process to cure the Greek economy of it’s massive government and trade deficits which is at the core of the current problems.
Europe could continue to trickle financial aid into the country but this will prolong the pain and it will not be sufficient motivation for the real changes that need to be made to make Greece of prosperous economy.
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