Greece Walks Out After 45 Minutes, Talks Collapse; Default Math: Who Foots the Bill? How Much?

Courtesy of Mish.

Congratulations to Greece for walking out of 11th hour Troika talks. Greece is going to default sooner or later and the sooner the better for everyone involved.

The Financial Times reports Greek Default Fears Rise as ‘Eleventh-Hour’ Talks Collapse.

Talks aimed at reaching an eleventh-hour deal between Greek ministers and their bailout creditors collapsed on Sunday evening after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations.

Greek negotiators, including Nikos Pappas, aide-de-camp to Prime Minister Alexis Tsipras, left the European Commission only 45 minutes after entering.

In a sign of how far attitudes had shifted, Sigmar Gabriel, Germany’s vice-chancellor and head of the country’s Social Democratic party — long seen as a more conciliatory political group — penned an article for Monday’s daily Bild newspaper in which he warned patience towards Greece in Germany was running thin .

“The game theorists of the Greek government are in the process of gambling away the future of their country,” Mr Gabriel wrote, in a thinly veiled dig at Yanis Varoufakis, the Greek finance minister who is an expert on game theory. “Europe and Germany will not let themselves be blackmailed. And we will not let the exaggerated electoral pledges of a partly communist government be paid for by German workers and their families.“

Gambling Away the Future

I have no love of radical left governments, communists, etc. But I do commend anyone willing to tell the IMF to go to hell. I also commend anyone bright enough to avoid suicide, and that’s what accepting the offer would mean.

If Greece defaults, as it should, it will have the opportunity to cram the entire bailout straight down the throats of the nannycrats and the IMF. All it has to do is initiate genuine reforms, make an alliance with Russia, cut taxes instead of raising them, and thrive.

Alas, the odds of genuine reform is slim, but at least it’s possible. Raising taxes to run the required current account surplus to pay back creditors while Greece goes into a 10-year depression is not going to happen.

At this point, any alleged gamble is better than a zero percent chance of success.

Farce of the Day

The Bild statement “Europe and Germany will not let