{"id":9726,"date":"2015-07-05T07:05:32","date_gmt":"2015-07-05T12:05:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9726"},"modified":"2015-07-05T07:05:32","modified_gmt":"2015-07-05T12:05:32","slug":"it-was-the-creditors-who-pushed-greece-over-the-edge","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9726","title":{"rendered":"It was the creditors who pushed Greece over the edge"},"content":{"rendered":"

It was the creditors who pushed Greece over the edge<\/a><\/h3>\n

\"Post<\/span><\/p>\n

If they had truly cared, the creditors could have easily prevented a default. Sadly, they found it more important to punish Greece and set an example.<\/strong><\/p>\n

Image: sticking posters for the NO campaign ahead of Sunday\u2019s referendum.<\/em><\/p>\n

On Tuesday, Greece became the first developed country to default on the IMF \u2014 and the pro-creditor camp is already propagating the convenient self-serving myth that the country\u2019s \u201cradical\u201d and \u201cirresponsible\u201d government is somehow to blame for this. Nothing could be further from the truth.<\/p>\n

To begin with, we should note that defaults come in many forms and guises \u2014 and not all of them are the debtor\u2019s fault. In my own research on the political economy of sovereign debt, I identify at least four types of default: (1) negotiated reschedulings; (2) voluntary restructurings; (3) unilateral moratoriums; and (4) outright debt repudiations.<\/p>\n

What is interesting about sovereign debt in general (and about international lending in particular) is the almost\u00a0wholesale absence of repudiation<\/em>. By and large, countries try extremely hard to repay their debts in full and on time \u2014 even when they cannot. In the worst case scenarios, they may be able to negotiate a rescheduling or restructuring of the debt with their lenders. In exceptional cases, countries can declare a moratorium on repayments. While this was\u00a0very common<\/a>prior to World War II, it is extremely rare today.<\/p>\n

In this respect, the first thing to note is that Greece clearly did not repudiate its debts outright: despite the\u00a0preliminary conclusions<\/a>\u00a0of the Greek parliamentary debt audit committee, which found much of the country\u2019s debt to be odious, illegitimate and illegal, the Syriza\/ANEL government still formally recognizes the legally binding character of the debt contracts. Its IMF default therefore looks more like an undeclared moratorium: Greece could still settle its arrears with the Fund at a later stage if it somehow managed to secure new credit.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

It was the creditors who pushed Greece over the edge If they had truly cared, the creditors could have easily prevented a default. Sadly, they found it more important to punish Greece and set an example. Image: sticking posters for the NO campaign ahead of Sunday\u2019s referendum. On Tuesday, Greece became the first developed country […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,200,1167,6761,418,6994,741,2868],"class_list":["post-9726","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-default","tag-greece","tag-greek-referendum","tag-imf","tag-roar-magazine","tag-sovereign-debt","tag-troika"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9726"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9726\/revisions"}],"predecessor-version":[{"id":9727,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9726\/revisions\/9727"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}