| nanarchy said: After a default, the banking system will collapse, people with money in those banks will be unable to get the money, businesses and government will be unable to get credit except at exhorbitant interest rates, on top of that it would likely require an exit from the euro dollar and give huge inflation to the local currency making imported goods completely unaffordable. If you think the current situation is bad it will be like a summer picnic compared to the economic mess from a default. |
most greeks dont have "money" on the bank left. sure they will lose some money, but nothing they cant survive or that realy hurts.
business will get MORE credits 1 year after a banking crash then without. the banks are zombies, they cant lend anything as long as they dont default, and they all will default if the government defaults. a the greek government doesnt need new credits if they stop repay the old.
having a weak currency is realy helpfull if you want your gdp to grow and to export more, and most greek people cant afford importe goods anyway.
inflation isnt that bad, its much fairer than just cutting social benefits and pensions.
a default would help greece in the shortrun, there wouldnt be more pain.
