March 8, 2011
"Banks that brought down Greece"
I missed this when it originally ran in the American magazine Vanity Fair. The interview by Jaime Lalinde with economics writer Michael Lewis:
"Question: Many people say it is a forgone conclusion that Greece will default. Do you agree with that?"
Michael Lewis: They will probably not call it a default, but yes, I don’t think they are going to pay back the money they owe. What’s going to happen, I think, is it is going to be “restructured.” That is the polite name. I think that the people who lent money to the Greek government—which is mainly the European Central Bank, a lot of bankers throughout Europe, and sovereign bond funds around the world—will not get 100 cents on the dollar from Greece. Left to their resources, without a total bailout from the rest of Europe or Germany, there is no way Greece can repay the debt.
The things they need to do to repay it would cause all the wealth production in the country to flee. There would need to be very punitive taxation, and restrictive macro-economic policies, for example. The country could be thrown into a depression if they did what they needed to do. I didn’t really address this issue in the piece ["Beware of Greeks bearing bonds" Oct 2010 Vanity Fair] because I thought the more interesting question was: Do they even want to? My feeling is that they really would rather take a pass. Paying off the debt implies the sort of resolve and collective purpose that they lack. "
When Lewis was asked to compare European countries to American baseball teams, this is the shape of the European League that Lewis conjectured:
"Greece: The Pittsburgh Pirates.
Germany: The Yankees.Iceland: The Mets.
Spain: The Mariners. Nice guys who have somehow managed to blow huge sums of money in the way not-so-nice people often do.
Ireland: The Twins. Actually, no, the Twins are a much more successful enterprise. The Royals.
Italy: The Marlins. Even though Italy is in financial trouble right now, like the Marlins are always in financial trouble one way or another, it still somehow feels like a successful place. Italy is this giant wild card; they can win the series at any point."
Greece's Golden Visa program
