Countries do not go bankrupt. They default and the debt stays until it is written off. The problem is that the countries were allowed to join the Europe without real convergence to the Maastrict criteria. Greece should never have been allowed to enter and the Eurostat officials, heavily paid by EU tax payers, did not do their job when they were responsible to monitor the compliance.
Why is anyone surprised that Greeks did not pay their taxes. Anyone doing business in Greece knew it so how come the EU officials did not? The structural reforms agreed back in 2010 and 2012 were not implemented so the politicians in Greece before Syriza failed the Greek people. The IMF has been the biggest at fault as they consistently failed to understand that debt sustainability was not possible in a country were not a single measure was growth supportive. Their estimates of sustainable debt was a debt to GDP of 100-120%. The Europeans invested too much faith in the IMF officials who sit in their ivory tower thinking.  The EU has to get rid of the IMF and bring in people centric management of the Eurozone or it will fail. The promises of financial engineering by JCJ are a joke and will be yet another white elephant. The two countries doing well are those which borrow at historically low interest rates such as UK and USA. Why not the EU to borrow more and spend on growth inducing investment. Why wait for handouts from the EU?...The EU is a political project that all the political elites of Europe are committed to. The entire foundation being 'ever closer union' power and authority is centralised into the hands of the EU bureaucrats, once gone that power never goes back, ever.  If the Greeks left the Euro this would shatter the politically important myth that surrendering power to the EU was a one way street. The Greeks simply can not be allowed to leave.

Never mind the colossal danger that after exit and the initial hooha that things settle down and then improve for the Greeks, what kind of message would that send to the other PIGS?
The EU elites will pay the bill using their taxpayers money, they will just need to find clever ways of disguising what they are doing. Their EU dreams are at stake, their power, salary and massive pensions, the Greeks debt will be paid for them.

As the Greek banks are emptied of hard cash, as Greece’s creditors clench all that can be clenched in expectation of ruin, and as our economically illiterate masters in Brussels flail about in their desperate desire to prevent a public relations catastrophe (too late, by the way), where does this leave Britain?  The UK's  Prime Minister was amidst the deaf in Europe last week, pretending to negotiate with people who refuse to listen to him. A typical response was that of the nonentity Martin Schulz, president of the European Parliament, who hectored him about the “hate”, “downright lies” and “national resentment” that he claimed informed the British debate about the EU.

Herr Schulz grew up in West Germany, but seems fluent in the methods of the Stasi. I doubt his outburst has swayed many preparing to vote in the referendum, other than in a direction he would not want. Herr Schulz’s main beef is that we wish to restrict free movement of people: he hints at our hostility, if not racism, towards Bulgarians and Romanians.

As I noted here last week, the thing most British people seem to want from a “renegotiation” is the right to control our borders: and it will not be granted.

 

A friend of mine died of cancer last week. He was in his fifties. Borrow as much as you can and spend it.

This is sound advice, because the worst is yet to come . . . by far.  If cash is to be held, it should be in dollars, because the United States is likely to fare better than other countries.   See https://naegeleblog.wordpress.... ("The World’s Next Credit Crunch Could Make 2008 Look Like A Hiccup")   Almost anything could trigger a crisis in today’s environment globally.   However, one of the greatest risks that has been perceived in Washington for many years is that a run would begin on the funds, which the central banks would be helpless to quell, leading to a liquidity crisis of unfathomable proportions.  The Depression-era tools and “safety nets” would prove useless, and panics would ensue.  Unlike American bank deposits that are insured by the FDIC, the funds are not insured at all.There are new laws in America to prevent us from withdrawing too much money from our own bank accounts. If we go beyond the federal limits, the federal government begins to investigate us.  They've been confiscating cash from depositors for years without court order or reasonable cause, just because businesses like the local diner had lots of cash receipts during the day and wanted to deposit it each day after the lunch crowd left. Too many large cash deposits in one week and the feds swoop in, confiscate it, and you have to sue to get it back. Welcome to the New America ... Of course the things are about to crash hard. Wall Street has been flooded with cash from the Fed and this has over inflated stocks (an that's inflation)  which caused a BOOM on Wall Street while their was a very slow recovery in the economy. NOW THE CHICKENS WILL COME HOME TO ROOST. It will get ugly!!

The Greek government has rejected a proposed five-month extension of the country’s bailout accord, Helena Smith reports from Athens. Greek officials have turned down the deal. “The text that was given to the Greek side is worse than the memorandum,” one was quoted as saying by the Athens news agency.  Government sources have lashed out at the “unacceptable” tactics employed by interlocutors representing foreign lenders at the EU, ECB and IMF. There are reports, says Helena, that prime minister Alexis Tsipras is making a speedy return to Athens....Donald Tusk and Jean-Claude Juncker have finally held their press conference. Here are the main points:  European council head Tusk said there are three days left to strike a deal with Greece, and we are very close to the day when the game is over. Both struck a conciliatory tone, responding to earlier comments by Tsipras who accused creditors of “blackmail and ultimatums”. European Commission president Juncker denied that the eurozone had issued an ultimatum to Greece.

Juncker also said that progress had been made in the debt talks, adding that there is a real chance of concluding an agreement. 

Last-ditch debt talks between Greece and its international creditors collapsed for the second time in less than 24 hours on Thursday, pushing the country towards the abyss of an unprecedented default in five days' time.  A second meeting of eurozone finance ministers was aborted after Athens failed to give ground on an ultimatum presented by its paymasters. In the three-hour meeting, both sides could not agree on a final version of a deal to report back to European leaders convening for a two-day summit.  The moment that Greece postponed repaying the IMF a couple of weeks ago was the start of the end game. Now the IMF has pulled out of further bail outs and the EZ and ECB can no longer carry their taxpayers to fund the rest unsupported. It wouldn't matter what proposals Greece puts forward now, none of them would be credible enough to seal the deal. Grexit is inevitable. It was inevitable two years and many billions ago. A pity that no-one was prepared to admit it, a lot of grief could have been spared ... so the gloves are finally coming off, threatening intimidation from the EU cannot defeat a political ideology that beholds different economic principles. Greece can be pushed only so far,if pride takes over they just might walk away knowing the creditors will lose everything ensuring both sides will suffer turmoil. This tale has an inevitable outcome, either a win-win for both sides or a lose - lose . the Greek government cannot accept the humiliation of an enforced lose-win, that would be political suicide. Go back to the Cuban Missile crisis, Kennedy gave up American missile bases in Poland in return for the Russian fleet turning back from the naval blockade. That deal averted a nuclear war, ensuring a lose - lose scenario resulted in a win- win. Same applies here, although the result could go either way...

LUXEMBOURG (AP) — Europe was scrambling Friday to pick up the pieces after another failed meeting over Greece's bailout that reinforced fears that the country was heading for bankruptcy and a possible euro exit.  Several European countries said openly they are getting ready for the possibility of Greece leaving the euro. And though there was no sign of panic in the streets of Greece over that prospect, officials say Greeks are taking money out of banks in growing amounts.  As a result, the European Central Bank has scheduled a teleconference of its governing council to discuss emergency credit for Greek banks — just two days after it increased the amounts it was willing to provide. The ECB has been steadily increasing the credit it allows Greek banks to draw on.  The ECB could turn off that support if it thinks Greece is going bust, but that's not expected ahead of Monday's emergency meeting of the eurozone's 19 leaders. The country needs a deal to get more bailout loans from creditors before June 30, when it has the first of a series of debt repayments it cannot afford.

Without a deal, the ECB would be under intense pressure to stop pumping money into a banking system that might collapse.  Relations between the creditors and the Greek government, which was elected in January on a promise to end the crippling austerity cuts demanded since 2010 in return for the bailout money, have soured significantly in recent days, with each side blaming the other in stronger language for the impasse.  In Athens, there were no visible signs of distress, or larger than usual lines at banks or supermarkets, despite reports of large withdrawals and transfers, which can also be made electronically.  An EU official said 2 billion euros ($2.3 billion) had been taken out of Greek banks in the last three days.  "Money is going out of the Greek banks faster than at any time before," said the official, who spoke only on condition of anonymity because of the sensitive nature of the situation.

Syriza ran on an anti-austerity platform, knowing [1] the dates and amounts of repayment of Greek debt, [2] the condition of the Greek economy, and [3] that Greece's creditors had never stated that they would agree with Syriza's anti-austerity platform and [a] change the amount of the loans due, [b] change the dates on which the loans were due, or [c] offer Greece more money even if it did not pay its loans in full and on time. Syriza gambled with the Greek people as its chips and bet that 3a, 3b, or 3c above would occur simply because of the intimidating, bullying, insulting and narcissistic tactics of Varoufakis and Tsipras. In the end, Syriza lost its bet because Greece's creditors refused to be intimidated, and they said: "Fine, Varoufakis and Tsipras, you keep your anti-austerity platform; we'll keep our money. Have a good day." Syriza has what it told Greek voters they would have: anti-austerity. Therefore, about what can Syriza and those who voted for it complain? Syriza has only itself to blame - as do those Greeks who voted for Syriza. They shall have no future loans from creditors, and they shall be responsible for finding the money to run their anti-austerity economy. Where will Syriza find such money to run their anti-austerity economy? Nowhere, because the money does not exist and never existed: Greeks do not and shall not pay taxes, so there is no revenue, and no private or governmental lender will loan Greece money. In the end, and ironically, Greece shall have its anti-austerity, but it shall not have an economy and, therefore, its economy shall be the greatest anti-austerity economy in the world. If any Greek Erinyes are searching for someone to blame for this, they can start with Varoufakis and Tsipras. And what shall happen next? "Let all the poisons, which lurk in the mud, hatch out."