Before, the Greeks had the drachma, and only took out sovereign loans in drachmas, then printed enough to pay off their loans. So lenders never got back what they’d loaned in real money, so no lender was foolish enough to loan the Greeks anything. Then Greece signed up for the Euro, and the banks rushed to make them loans in hard currency, loans Greece has no way of paying off. But sovereign loans are sovereign. For example, in 1862, Mexico could not pay off a French loan, so the French foreclosed and made Mexico a colony. (As it happens, the French Army won’t fight without mayonnaise, and the Mexicans managed to sink the French ship bringing their salad dressing, after which the French gave up, and the Mexicans still celebrate the Sinko de Mayo.).So the Troika ordered the Greeks to stop providing state healthcare, to stop paying pensions to old people, and to lay off most government workers. After which, a lot of people who’d sold to government workers and the state healthcare workers and the pensioners also lost their jobs. Which the Greeks deserved. Sovereign debt is sacred, and must be repaid before the ordinary citizens are fed..The Greek Government BEFORE Syriza said they would hold a referendum, the Troika told them a referendum was NOT allowed, so the Greeks didn’t get to vote until the election this year that tossed out the former government and put in Syriza. Which would have been the right thing to do if the Greeks had re-elected the good government..Syriza ran on a platform with two planks: 1) Greece must keep the Euro; and 2) Austerity must end..The Troika explained that 2) was not allowed, it was totally illegal. Syriza did not listen. After five months, Syriza called a referendum. The Troika patiently pointed out that a referendum was STILL illegal. Syriza is holding the referendum anyway..The ECB cut off the Emergency Liquidity Assistance that was keeping the Greek Banks open, so they’re all closed. This was absolutely necessary. If Syriza does not honour a sovereign debt, Greeks must be made to starve one way or the other..The Troika has figured out that the Euro will be MUCH better off without Greece, so they’ll evict Greece if the Greek voters vote ‘NO’ and will announce impossible austerity conditions if the Greek voters vote ‘YES’ to staying in the Euro at any cost..Just as England and France, who avoided war with Germany in ‘38 because they weren’t ready, declared war on Germany in ‘39 because they had all the protections in place to ensure Germany could not do any damage. It’s the same now: the Troika have put all the protections in place so that Grexit can not do any damage.
Before, the Greeks had the drachma, and only took out sovereign loans in drachmas, then printed enough to pay off their loans. So lenders never got back what they’d loaned in real money, so no lender was foolish enough to loan the Greeks anything. Then Greece signed up for the Euro, and the banks rushed to make them loans in hard currency, loans Greece has no way of paying off. But sovereign loans are sovereign. For example, in 1862, Mexico could not pay off a French loan, so the French foreclosed and made Mexico a colony. (As it happens, the French Army won’t fight without mayonnaise, and the Mexicans managed to sink the French ship bringing their salad dressing, after which the French gave up, and the Mexicans still celebrate the Sinko de Mayo.).So the Troika ordered the Greeks to stop providing state healthcare, to stop paying pensions to old people, and to lay off most government workers. After which, a lot of people who’d sold to government workers and the state healthcare workers and the pensioners also lost their jobs. Which the Greeks deserved. Sovereign debt is sacred, and must be repaid before the ordinary citizens are fed..The Greek Government BEFORE Syriza said they would hold a referendum, the Troika told them a referendum was NOT allowed, so the Greeks didn’t get to vote until the election this year that tossed out the former government and put in Syriza. Which would have been the right thing to do if the Greeks had re-elected the good government..Syriza ran on a platform with two planks: 1) Greece must keep the Euro; and 2) Austerity must end..The Troika explained that 2) was not allowed, it was totally illegal. Syriza did not listen. After five months, Syriza called a referendum. The Troika patiently pointed out that a referendum was STILL illegal. Syriza is holding the referendum anyway..The ECB cut off the Emergency Liquidity Assistance that was keeping the Greek Banks open, so they’re all closed. This was absolutely necessary. If Syriza does not honour a sovereign debt, Greeks must be made to starve one way or the other..The Troika has figured out that the Euro will be MUCH better off without Greece, so they’ll evict Greece if the Greek voters vote ‘NO’ and will announce impossible austerity conditions if the Greek voters vote ‘YES’ to staying in the Euro at any cost..Just as England and France, who avoided war with Germany in ‘38 because they weren’t ready, declared war on Germany in ‘39 because they had all the protections in place to ensure Germany could not do any damage. It’s the same now: the Troika have put all the protections in place so that Grexit can not do any damage.