5/16    Can anyone tell me what Greece is hoping for by rejecting austerity?
        From here it seems like the austerity is a pretty generous attempt
        to keep Greece from imploding entirely.   Are they hoping the
        Germans will put them on eternal state welfare, or what?
        Also, why would an outright default mean they must leave the Euro?
        Is it just that they won't be able to pay basic gvmt services
        w/o the ability to print or borrow money, so they must leave the
        Euro so that they can print money?
        \_ The complaint is that austerity is not likely to help the country's
           economy in the long term.  It's either a short-sighted cash grab
           by creditors who want some money now, even at the cost of hurting
           the economy further, or an attempt to punish the country for living
           beyond its means.  The latter makes some sense, but the people who
           caused the problem in the first place are unlikely to be the ones
           hurting from the austerity measures.
        \_ They need to devalue their currency so that they can reduce their
           debt burden and have their labor costs be competitive enough for
           export growth without forcing deflation on everyone. To do that,
           they need to leave the Euro. It is too hard to have a monetary
           policy that is appropriate for both Germany and Greek. In the US,
           we do it, but only because more productive areas like California
           massively subsidize the less productive areas like Mississippi.
           \_ This is an argument that the Euro is due to breakup in any
              case.
           \_ is their debt burdon in Euros?  If so, how would devaluing
              their currency help?
              \_ I had assumed that if they left the Euro they would just flat
                 out default as part of the deal. -op
              \_ The would either default on the Euro debt or swap it for
                 Drachmas, which they could then devalue. Even more
                 importantly, they could start paying everyone in devalued
                 Drachmas, which would make imported goods cost more but
                 domestic goods would get cheaper, boosting demand for
                 locally produced goods. If they can continue to export
                 good cheaply, they would get increased demands for exports,
                 boosting employment even more.
        \_ Interesting article in Rueters:
           http://preview.tinyurl.com/ckblo4q
           Apparently the Greeks think the rest of Europe is bluffing and
           will continue to bail them out.
           \_ They may be right, but I'm not sure I'm willing to be my savings
              on it.  I will be vary dangerous to kick them out.
           \_ They may be right, it would be very dangeous to kick them out.
              On the other hand, if they are never going to be able to solve
              their problems, it's better to cut losses early.