Tuesday, July 14, 2015

IMF Concurs on Evaluation of Greece

So, the IMF published a memo on the Greece debt situation (memo is here, link referencing story is here). Basically, the memo outlines why the IMF will refuse to give Greece any more money, unless the other EU countries sign up to give Greece their money first. It is, by all appearances, a rational response to the most recent asinine bailout "agreement" reached over the weekend, which calls for (among other things) the IMF to dump another 50B euros into the bottomless monetary waste pit that is Greece.

Yes, by refusing to participate in the latest round of handouts, the IMF might be writing off its loan to Greece. However, with the current economic and political realities in Greece, they probably should have written off that money at the point they "lent" it, and certainly should have penciled it in as "gone" at the point of the latest elections. Greece simply has no will to repay their national debts, even if they had the ability to do so (which they also do not).

The important point, though, as the article somewhat notes, is that the EU basically has two options at this point. Option one, as laid out in the IMF memo and echoed in the article, is that the EU countries subsidize Greece indefinitely, creating a wealth redistribution funnel from the prosperous (read: capitalist) countries to the fiscally irresponsible (read: socialist) ones, where the people in Germany work hard to pay for the generous vacations and pensions for the people in Greece. Option two is for the EU to find/craft a way for Greece to denominate its debts in its own currency, so the market can punish their fiscal malfeasance over and over and over again, until the people finally "get it", and change their political policies.

Here's hoping they pick the second option, and not some half-measure somewhere in between to just delay the inevitable, while the people of Greece continue to suffer.

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