As Fear of Greece's likelihood of default grows, the bank lines are beginning to swell with Greeks eager to pull out their saving. Unfortunately for Greeks, the government capped their maximum outtake at 60 euros a day, as banks increasingly become even more fearful of the citizenry pulling out their saving. Greece has much bigger problems than the debt it owes its creditors. In truth, as of today, Greece does not have a sustainable way of paying back that debt, to put it plainly.
The EU contributes four times as many euros to Greece-for every one Euro Greece allocates through GDP to the EU. It can be said, Greece's economy exists merely because it is a member state of the EU. Greece is another example of a world to afraid to let mismanagement get what they deserve, a sign pointing to the door. What's going on in Greece's is not much different than the absolutely erroneous idea of too big to fail. The second governments or the IMF decide to bailout company's or other nations, than there is no longer a level playing field. The attractiveness of the free market was built on the idea of very limited government interference, allowing private industry to flourish.
What the bailouts showed us, was that if you grew your company to a large enough or even minuscule portion of the economy, the government via the people's tax money, will now pay for a companies failure in management and horrendous business decisions. Business leaders did a successful job in convincing our representatives that their companies importance to the inter workings of everyday life was just too substantial to let them go under. Free markets are no longer free if the government is picking winners and losers. What the government failed to do, was was to allow the bad apples of the economy to get the hammer, let human perseverance take over and create a more effective, efficient company.
Now the world watches Europe as they brace for a not so likely, but effective in creating fear-Greece's so called "impending"default. For Greece to default and not accept creditors terms, would go down as one of the worst business decisions ever made by any nation or institution. Why, well because Greece is an import based economy. If they were to leave the EU, their new currency is projected to be worth thirty percent less than than the euro, and that's the best case scenario. If Greece lacks the ability to pay their bills now, how would having them pay 30 percent more, for goods that contribute a majority portion to their economy, get them any closer to even. It won't, and Merkel along with Draghi have time and again begged Greece for reasonable reform, only to be met with ludicrous suggestions of money owed for actions taken place over 70 years ago.
Given the state of Greece's economy and the prospect of default, many expected the newly elected prime minister to sign a deal. Mr. Tsiparas, chose another route, and decided to over-play a hand that was never attractive to begin with. The only argument for the EU to allow Greece to stay on as a member state is the argument of unprecedented. Well the EU is unprecedented, nations never, truly United, divisions of power/capital never really allotted properly, would be served best if they let this play out. Greece will not default, and surely the Greek economy separate from the EU does not look enticing.