How the Greeks do it

[cruiser2]

Looking through some papers, found a post from Louise in November 2011 which is very appropriate to what is happening in Cyprus now. Wonder if it would work in todays climate.

[Workingman]

I love a mystery, but this one is so mysterious that I don't get it.

[cruiser2]

WM,
This is it.

It is a slow day in a little Greek village.
The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

A rich German tourist is driving through the village, stopos at the local hotel and lays a 100 euro on the desk. He tells the owner he wants to inspect the rooms upstairs in order to pick one for the night.
The owner gives him the keys to several rooms and as soon as he has walked upstairs, the hotelier grabs the 100 euro note and runs next door to pay his debt to the butcher.
The butcher takes the 100 euro note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the 100 euro note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers Co-op takes the 100 euro note and runs to pay his drinks bill at the taverna.
The publican slips the 100 euro note along to the local prostitute drinking at the bar, who has been facing hard times and has had to offer him services on credit.
The hooker then rushes to the hotel and pays her room bill to the hotel owner with the 100 euro note.
The hotel owner then places the 100 euro note back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up 100 euro note, states the rooms are not satisfactory, pockets the money and kleaves town.
No one produces anything
No one earns anything
However, the whol;e village is out of debt and looking to the future with a lot more optimism
And that is how the bail out package works.

[Suff]

If it were the hotelier, it would work perfectly. But, in fact, it is the Troika who hold the remaining debt. And the Troika who are bailing them out. So the Troika are giving money to the Greeks so they can pay interest on the money they already owe them.

In the end, the Greeks must pay the interest on the debt they already owe, plus the debt they already owe, plus the bailout.

They are in hock for the next 100 years. Or until they default 100%. Whichever comes first. The sad thing is that the Greek economy is already in balance, in fact it has a small surplus. The massive cuts which have decimated their business, put hundreds of thousands out of work, blighted the economy and lives, has done the job. They can now stand alone and grow.

Why aren't they? Because the interest on the debt they owe (not the principal), is greater than their entire free cash.

So each bail out is like a new credit card to pay the interest on the last one. We all know how that works don't we.....