Can the United States prevent a Grexit? →

June 30, 2015 |

The Greece situation is growing more dire by the minute. If Greece misses a loan payment of 1.6 billion euros to the I.M.F. that expires today — and it seems likely — the country will be in default and, slowly but surely, things will start spiraling out of control in the entire euro zone. The referendum Greek Prime Minister Alexis Tsipras announced for Sunday may stem the tide if Greeks vote yes, but if it’s a no — as Tsipras himself has called for — Greece’s exit from the eurozone appears to be the only possible outcome.

John Cassidy, writing for The New Yorker:

(…) If there is to be a last-minute compromise, the Europeans will have to offer Tsipras something that will justify a u-turn. One option, which the U.S. government appears to be pursuing, is a promise of at least some debt relief. But that seems to be a distant possibility. At a press conference in Berlin on Monday, Merkel appeared alongside her Vice-Chancellor, Sigmar Gabriel, who reiterated that Greece had to follow the same rules as everyone else in the euro zone. Debt relief would be considered only in a follow-up agreement, he indicated, and even then it would be limited to extending maturities and lowering interest rates—it would not entail outright cancellation. The Greek Prime Minister wanted a very different euro zone, which was a dangerous idea, Gabriel added.

Greece wants to pay, but not at any cost to its citizens. I’m well aware that in order for the financial system to function every country needs to meet its obligations, but I don’t accept as fact that creditors can never lose. Purchasing debt is an investment and as such, implies certain risks. The fact that Greece’s creditors are unwilling to assume their fair share of the burden seems profoundly unjust to me — even if, like I said, Greece should do everything in its power to uphold its own end of the bargain.

Ironically enough, back in 1953, when it was the Germans who were up to their neck in mud, Europe granted them a generous debt relief treaty. Now they’re the ones claiming Greece doesn’t deserve the same treatment. I understand the specifics of each country’s predicaments are vastly different, but come on.

I guess that’s just another reason why I’m not cut out to be a politician.