On the one hand, we can understand why Greeks do not to want to pay for the false and self-serving promises of the politicians and bureaucrats who brought the country into its current predicaments. So repudiation of the state’s debt may be the least costly solution, at least for ordinary people.
On the other hand, politicians like Alexis Tsipras who believe that they can extort still more money from European taxpayers in order to buy political support at home are living in a fairy tale or, should I say, in a horror movie (see “Defiant Message From Greece”, Wall Street Journal, May 17, 2012). They may be reminded of reality when a bank panic follows from people’s understandable fear that the state will devalue their euros into a local currency. For the state, lying is a second nature.
The problem is simple. The Greek state has borrowed more than it is able to reimburse. Its taxpayers will not, or cannot, pay. But somebody has to pay. The cost will be shared by cheated lenders and ordinary people. Many of the former (but not all, as lenders include, directly or indirectly, a large number of individual savers) have taken a calculated risk, and lost; too bad for them! As for the latter, they are already experiencing a big drop in their standard of living, and it is far from over. Let’s hope that they will draw the lesson that they should not trust the state, instead or running into the arms of their tormentor.