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d. Unless one defines the "world" as Greece's financial lenders who bet on a losing horse and now are trying to sell it in order not to lose their money, I can't see how the world stands to gain by Greece's default.

Greece's lenders would be hurt by a Greek default like they are being helped by the bailout.

In fact, a Greek default would be a good thing, macroeconomically.

Maybe the EU could declare a debt jubilee. All EU debt would be null and void. Anyone made insolvent by this move would be made whole by the ECB.

Given the amount of circular debt within Europe (where A owes B owes C) the cost of this would be rather smaller than the 200% of EU GDP outstanding as debt.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Tue May 25th, 2010 at 06:00:06 PM EST
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