At this point there is no easy fix and an international market calamity is unavoidable. The only thing to do is to minimize the damage and make sure that creditors won't freak out. Markets will take a dip regardless of what happens because Greece has gotten to a point that the ECB did not want Greece to get to. The actual ideal solution depends on what is to prioritized. If Greece's economic growth is to be prioritized the solution will be to actually forgive portions of the debt and screw over the investors. This will help the Greek economy, but it will piss off investors who will be much less likely to invest in Greece or the EU in the future which is why this scenario is just out. If repayment is the priority and keeping creditors happy, the ECB will have to pony up more cash for Greece, and Greece will have to find a way to get its finances under control which is a difficult task. The difficulties lie in two areas for Greece. The first is that a vast percentage of the population in Greece is employed by the government and as such the #1 employer will have to cut back which is going to cause problems for Greece who has no strong industry but a very strong currency. The second problem Greece has is that it has a culture of tax evasion. Greeks don't feel that it is their duty to pay taxes, as a matter of fact there is a strong culture of avoiding ones taxes. This means that Greece will have to find a way to insure it gets its revenue, even while its population does worse off. At the end of the day, Greece shouldn't have been given the money it was asking for, but we are well past that point.
Ultimately the way for Greece to get investors in the future is to be a productive growing economy. While Greece's existing creditors may be "pissed off" for a while, they aren't the only people in the business. Smart investors won't care so much about the past that they'd miss out on a good investment.
Greece should leave the EU, and the debt should be forgiven. It should have never joined and will be much better off outside, like Switzerland (a structurally similar economy).
The idea that Greeks have a "culture of tax evasion" is simplistic. A lot of this has to do with the government's cozy relationship with Greek oligarchs. You are less inclined to pay taxes if they are perceived as propping up a corrupt government.
For all its flaws, Syriza doesn't seem to be as corrupt. I also don't see it as the "far-left" ideologically socialist party it's often portrayed as. They seem to be people that will learn fast where and when government should intervene productively.
As a german, just letting billions of € go while our infrastructure and social system could need more money, this just doesn't feel right.
If we would be the united states of europe this would be a different story, but currently it seems that greece just tries to leech as much money as possible while openly offending us. And by the way, there are poorer states than greece that will pay it's share of the bill in the eu. Am I wrong?
> investors who will be much less likely to invest in Greece or the EU in the future
I hope so. This will be a win/win situation for everybody.
This way investors will learn to choose better and look more closely at their money the next time, instead to act like fools for years and them panic and waterboarding entire countries unless they agree to assume their private failures as own and fix with public money their recurrent malpractices.
How are the Greeks able to avoid taxes if the government is the primary employer? Can't the government just deduct their taxes for its own use before paying them?
