Quote:
Originally Posted by Simpsin
If Greece goes bankrupt,what will be the effects? I mean,the public debt goes again to zero ed everything restart?What would be some negative effects?
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We discussed this in depth in late spring/early summer, do a forum search.
In short, in principle, if Greece were to default it would be cut off from international credit and, since the country's economy is not self-sufficient in an industrial sense, there would be widespread deprivation of industrial goods and probably also the basics such as food, fuel, and medicine, probably within 3-6 months, maybe less.
If such were to occur, Greece would need an international humanitarian aid package until such time that its few comparative advantages could take effect and stabilize the economy at a much lower than its current already reduced standard of living.
But this will not happen because, on the one hand, the Greeks themselves know that they cannot possibly manage their economic affairs on their own with any significant success, they are highly dependent on their international creditors to maintain even a modest European standard of living; on the other hand, Greece is strategically important territory and western Europe/NATO cannot afford to let it go for their own security.
So Greece will most likely continue at the bottom end of the spectrum of a European standard of living, controlled and secured by outsiders, with some give and take here and there.
Good Luck!
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