At this point, and unless there is a fundamental change in the “faith-based economics of the Troika,” as Marshall Auerback and Rob Parenteau see it, Greece will have no alternative but to default.
The question is, what explains the Troika’s interest, under German insistence, on continuing to impose such austerity measures on Greek workers?
Well, let’s face it: this has far less at this stage to do with Greece (even as the prevailing mainstream narrative continues to perpetuate the picture of a lazy, unproductive country full of profligates and scroungers), than punishing other potential fiscal deviants and recalcitrants.
Angela Merkel clearly has Italy in her sights. She, and the Troika are scapegoating the Greeks – in order to make sure that should Greece take the rumored “hair cut” on its debt and restructure, the other peripheral countries – especially Italy – won’t get any ideas and be tempted down the same path of forced debt restructuring, but rather will redouble their efforts to achieve arbitrary fiscal targets on an equally arbitrary timeline (and how’s that worked out for Greece?), and learn to “live within their means”, as the Germans always piously lecture the world. This is the strategy to prevent what is euphemistically called the “contagion impact”. In reality, it is also called the principle of collective guilt – destroying the livelihoods of thirteen million people for political or ideological or faith based reasons, which is frankly disgusting and unacceptable. Given their own history, German policy makers should understand this phenomenon. Indeed in many respects, this all too eerily resembles the tangled, twisted mess left by the demands of WWI reparation on Germany – except this time around, Germany is one of the creditor nations imposing their will on the crushed debtors.