By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The anger you feel about your plight is understandable. You are staring at several unpalatable alternatives, all of which will involve big cuts in living standards for years to come. But the options you face are not all equally bad. You must avoid an emotional reaction that leaves you in an even worse state — and you must ostracise those who resort to violence.
One option is to persuade your politicians to say “no” (or “ohi”) to the euro zone/International Monetary Fund austerity plan. The scheme is not perfect. But rejecting it out of hand would be childish. If there is no agreed plan, you will get no money. The consequence isn’t just that the government would default on the loans it took out on your behalf. There would be a run on your banks and an even deeper recession. You would probably also lose your remaining friends in Europe who would consider you spoiled brats.
That’s not to say you should repay all your debts. Even with Herculean efforts, that won’t be possible. But you can probably negotiate an orderly default some time in the next year. An orderly default would be one where your debts were cut, say in half, but in the context of an agreed euro zone/IMF programme which provided you with enough money to survive until you are healthier.
You might ask why you can’t have an “orderly” default now. Wouldn’t that be better than waiting? The answer would be “yes” if an orderly default could be agreed now. Unfortunately, the rest of Europe isn’t yet ready for your default. So they won’t agree on one; and that, by definition, means a default now would be disorderly.