Tuesday, June 23, 2015

Ultimate test of democracy

Note: This is a follow-up to “Debt catatonia.”

Greece, the birthplace of democracy, faces the ultimate test of democracy. Only one outcome guarantees they will pass the test.

Greeks’ elected representatives, especially Syriza, must have their constituents’ support to pay their debt to Europe. If they don’t have that support, they will either accede to Europe’s demands, incurring rebellion, or kill the deal, thereby forcing a snap election to form a new government, as the prime minister has pledged. Who knows what government that would give rise to.

But, if you think default is inevitable, if you think Greeks can’t forsake their socialism, if you think Greeks will never make good on their debt, defaulting sooner is preferable to defaulting later. Defaulting later just prolongs the pain of Greece’s economic depression.

Related: “Divided we fall.”

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