So Greece has finally taken the plunge. It went into default. Of course there is a referendum waiting to happen. So 5 days after it was supposed to pay its creditors, Greece will do a referendum. As if for past months, creditors and borrowers were just enjoying paid vacation hopping from one meeting to another. Really, if the Greeks wanted a referendum they should have done it and over with it by now.
And therein lies the arrogance and brashness of new age borrowers. Playing the victim card and funding the media's craving for the underdog story. You can see it across the globe. The big businesses in the United States being bailed out by their government, the sovereign defaults. So many people and businesses willingly wanting to go bankrupt as to show creditors who the king in the transaction is.
Greece is just a symbol. In India take a closer look at our state-owned power companies. Thousands of crores of debt is what they have raked in to supply power to their people. But neither they have the power to give to people nor have they any idea how to repay those loans. Other departments are doing no good either for everyone knows that you have created a debt monster. You keep feeding debt like that, and you reach the point where everyone knows it's never going to be returned.
Its not just governments, look at the Vijay Mallya story. Shareholders, employees, taxpayers funds were all deployed to keep his businesses alive. Loans were handed out over generously as in many cases over valuing properties and shares. What could anyone do? Nothing.
So what's the lesson in the Greek default? We the common men and women will bear the brunt of ambitions and foolhardiness of politicians and greedy men. In all such cases it's the tax payer's money that is used to feed bailouts, debts, and restructuring relief. For the trillion that Greece , in some other European country a peasant will be made to work more hard to pay more taxes so that they someone can organize more fancy meetings to organize bailouts or fund more debt. The logic would be the betterment of that same peasant. But in his heart, he would know how much he is really progressing.
If they write off those debts, more countries will call for write-offs, more taxpayer money will be drained and the arrogance and powers of those in debt will only rise.
In the meantime, the Indian finance ministry if looking for bailouts for the steel industry as it is heavy in debt and the finance ministry feels shy in asking the banks of their accountability in giving out debts like free candy,