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mk  ·  4671 days ago  ·  link  ·    ·  parent  ·  post: Greece Is Burning
It very well may be initially. There are a number of issues with it, and I believe that runs on the banks is one. For that reason, I think that governments like to default by surprise.

It may also be very hard for Greece to sell debt for some time.

That said, in the long run, it may very well be the less painful choice. By defaulting, they do get to clean the slate to and extent, and they do gain the new option to print currency as a method of financial stimulus.

Argentina defaulted in 2002, here are some effects:

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999...

But, things seemed to work out in the end for them:

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999...