Saturday, July 02, 2011

Paying Back Your Loans Is Undemocratic?

Prime Minister Papandreau of Greece, quoted at, following the Greek government approval of an austerity budget. The budget vote was necessary for Greece to secure yet more loans from the rest of the EU.
“We are living in Greece through very rough times and this means that democratic governments must make hard choices in the name of protecting their people and moving their societies forward,” he said.

The Greek premier, however, reserved some strong criticism for the agencies that have downgraded the country’s credit rating to one step before declaring it bankrupt.

“If the ratings agencies come and downgrade us one more notch, then they will have more power in their decisions than the Greek people and Greek parliamentarians,” he said. “And that is unacceptable if you want to have a democratic world.”
That last bit is the sad part. They borrowed money until they had too much debt to pay back and too high a deficit to continue to finance (they are both both bankrupt and insolvent) and they did so in a fully democratic way. They voted themselves more and more and more goodies.

Now that the mathematics of the situation has taken over and their creditors are taking steps to protect their investments, it's no longer democratic to the Greek PM. In other words, it was perfectly OK to borrow the money, but being made to pay it back is unjust.

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