It is easy to see why Syriza put debt repudiation at the heart of its electoral campaign. John Paul Getty once opined that \u201cif you owe the bank $100, that\u2019s your problem; if you owe the bank $100m, that\u2019s the bank\u2019s problem\u201d\u009d. Greece\u2019s predicament may ultimately force creditors to the negotiating table. To service its debt burden would require Greece to operate as a quasi slave economy, running a primary surplus of 5 per cent of GDP for years, purely for the benefit of its foreign creditors. Even the IMF has dropped hints in favour of some debt forgiveness.<\/p>\n
But Greece\u2019s EU creditors have equally strong reasons for refusing. Caving to Syriza\u2019s demands would come at a high political cost, particularly for Germany\u2019s Angela Merkel, who is harried by the eurosceptic AfD on her right. Other struggling countries would find their own radical parties emboldened by Syriza\u2019s success. No country deserves to live beyond its means indefinitely.<\/p>\n
Back in 2011, Greece posed an existential threat to the eurozone. Today, Berlin and Frankfurt are no longer as frightened by the prospect of Greece leaving the single currency. Yet for the Greek people this would be a catastrophe: a giant economic step backwards and a blow to living standards just as severe as any endured under austerity.<\/p>\n