Eurozone debt crisis - Exit, Voice, Loyalty or Default

The game creditors and borrowers play is anything but.

The socio-economic impact of a financial crisis is so great, that the debt problems are so great that they are remembered for generations.   

Even today, Herbert Hoover and Franklin Roosevelt are castigated and revered by their contrasting reactions to America's Great Depression of the 1930's.  

It is not difficult to see who will be the Herbert Hoover of the Eurozone in crisis, insisting on austerity in the face of unemployment of over 20% in some countries, and youth unemployment creating a new European lost generation. 

The Eurozone appears to be increasingly dysfunctional (Eurozone monster says Piketty).  Creditors and Borrowers take more and more extreme, even desperate negotiating, positions,   

Following the Hirschman model, we can see the evolution of the Eurozone crisis as  follows: 

Loyalty - Austerity:  The hapless borrowers who had been allowed to accumulate huge external debts initially agreed to adopt austerity measures.  The creditos provided some new debt and shifted the existing debt among themselves (the bailouts)

Voice - Negotiations: Giving  the enormous social costs,  borrower sought to renegoatiate and soften the austerity conditions.

Exit - The threat of exit from the Eurozone relationship is still pending, not only from desperate borrowers, but also from frustatated creditors. 

Neglect - Default:  If the relationship cannot be fixed, nor resolved in an orderly manner, there's always the neglect or  default option.  The D word !

The creditors will win as usual. But history will not see it as a  victory worth celebrating.
Mariana Abrantes de Sousa
PPP Lusofonia

Mais fácil votar com os pés - http://beijozxxi.blogspot.pt/2012/10/cada-vez-mais-facil-votar-com-os-pes.html
Der Spiegel - Power struggle in the  Eurozone http://www.spiegel.de/international/europe/merkel-and-juncker-in-stand-off-over-greece-a-1023365.html#ref=nl-international