Thanks to Merkel, Sarcozy, and Hollande and their fellow European politicians, a small debt workout that could have easily taken place in 2010 with hardly a ripple, has now turned into a major economic and political disaster -- for Greece and for everyone in the Eurozone.
So, now what happens with Spain, Italy, and Ireland? Left wing political parties, like that now in power in Greece, are surging in popularity in Spain, Italy, and Ireland. So, the next chapter will involve these countries. Avoiding reality in 2010 has consequences. Unfortunately, avoiding reality in 2010 means a much worse reality in 2015 and beyond.
Most of the debt in the Eurozone is unpayable.....period. Greece is not an outlier. Spain, Italy, and Ireland are not the only other profligate nations. France is in deep, deep trouble as well and will, in time, be forced to restructure (i.e. default) on its own sovereign debt. Even Germany is not immune from the problem of too much debt. This is a disease brought on by an unaffordable entitlement policy that afflicts Europe and the US. Default, in time, is the only ultimate result.
No western nation can afford its current entitlement programs -- not even the US. Today's Greece is a window into our own future and into the future of entire Eurozone.