AS THE Greek deal was being hammered out on Sunday, and the harsh details leaked out, the hashtag #thisisacoup trended on Twitter. The people of Greece had voted against austerity a week previously, but austerity (and overseas monitoring of their economic policies) was being foisted upon them.
But this is an oversimplification of the forces at work, regardless of whether Greece manages to meet all the conditions of the deal (probably not) or whether the Greeks handled the negotiations well (definitely not). The narrative is that Greece is being penalised to bail out "the banks". But if only the banks were the creditors, the whole issue might be easier to deal with. Go back to the 2012 deal; the private sector creditors (the banks) were made to take a 50% write-off (equivalent to €100 billion, or €10,000 per Greek citizen) and the official creditors stepped in, in a package that involved extended debt maturities, lower interest rates on existing debt and holidays for interest payments. (All...Continue reading
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