looks like Tsipras has folded

[Gustaf]

There is a lot of posturing on both sides that I strongly disagree with.

1. Jfern keep harping on about banks. Little of Greek debt is to any banks so they have no stake in this anymore. This is because we bailed them out and put the debt on tax payers. Which I think was wrong, in agreement with what traindistance posted. However, that means that the ship has sailed on punishing irresponsible creditors. The people who would now be punished by forgiving Greek debt made the mistake of being nice enough to the Greeks to give them a haircut on the debt and move in to guarantee it. So that morality tale has no point now.

2. The Greek people will suffer and that suffering should not be treated in a flippant manner. However, as Ag and others have pointed out, they will suffer under any outcome that isn't just giving them lots of money for free. And that one was never gonna happen.

3. Austerity can be debated back and forth forever but it isn't as clearly useless as some would like to think (see the Baltics for instance).

4. Greece isn't really a classic case of the austerity debate. For starters, the classic Keynesian idea is that a government in a recession should borrow money to prop up demand. Greece can't borrow money because no one will lend them any because they fcked up their finances. Much of the underlying problem is really, really poor political and economic institutions controlled by interest groups who have managed to block any reform. This reform is not some neo-liberal evil. Some of it may well be from the perspective of the far-left but most of it is just plain economic sense. The fact that Greece has not implemented any reforms is why creditors want to impose on their sovereignty. There is no trust left. And the fact that corrupt Greek institutions refuse reform is why the austerity has ended up hurting the poor and powerless so much. That outcome isn't purely the fault of creditors.

5. So, yes, the EU is being undemocratic (omg shocker), the euro is a disaster and Greece should leave. But that doesn't change any of the above. This outcome is probably the worst one because it will continue this meaningless austerity and continue to prop up the euro. Let's revisit the situation in a year or something.