depends on what the consequences for Greece are

Look at it from an individual standpoint - if you are up to your eyes in debt, you can just declare bankruptcy and wipe the slate clean - but with the 'price' of that being that being a poor credit rating, being locked out of cheap credit, inability to get a mortgage and so on for X years. So its an option for all of us, but one that is too unpalatable for most.

Of course, if Greece's debts are wiped off the slate and they face no negative consequences of that, then there will be others thinking that that is quite a good idea, so any write-off has to be sensible.

Plus there is the reverse angle to this - as much as Greece/other countries need to know that there are severe consequences to racking up huge debts, what about the lenders? Shouldn't they be learning the lesson of extending too much cheap credit to countries that don't really have the means to pay it back? What about responsible lending?

As much as I don't like the idea of a debt write off (nor Corbyn's ideological reasons for calling for it) I also dislike the idea of lenders nopt also taking some responsibility for their actions and sharing in the consequences of what is a s**t situation for everyone.

(FWIW, I suspect there is already quite a bit of writing off going on anyway - that's effectively what rolling over some of the debt is as it'll never be repaid/inflation will erode it)

Posted By: CWC on June 30th 2015 at 13:12:16

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