INTERNATIONAL
FALL 2015
Greece’s very vocal intransigence
about its inability and unwillingness to
repay international loans has also caused
major private divestment. According to
Newsweek, from 2010 to 2014, international bank exposure fell precipitously.
While in 2010 French banks conducted
40 percent of all lending into Greece,
in 2014, following two years of Greek
anti-austerity protests, that number is
now 0.6 percent. The story is similar for
banks in Portugal, Japan, Italy, the Netherlands, and Germany. While loans from
the IMF have filled the void in the wake
of this private divestment, all evidence
indicates that these loans will dry up too,
following Greece’s June 5 referendum
in which 61.3 percent of its population
voted to reject tightened lending terms.
Like its public, for years Greece’s politicians have also suspended disbelief and
rejected austerity measures that would
reign in the Greek public sector. It might
be worth noting how mild these suggested austerity measures really were. Economist Tyler Cowen, in a note entitled “How
savage has European austerity been?”
pointed out that austerity would have in-
volved only slight reductions in spending.
When the IMF provided a 110 billion euro bailout in May of 2010 and
then suggested cutting public spending
to the Greek government, the Greek public revolted in a series of massive demonstrations that continued for two years
and caused millions of euros of damage to Greece. Most