Greece

This is what has happened in Greece.

It is probably utter cock, which is why I'm writing it. Please let me know what is wrong here?

I am not an economist.

Greece is in debt. It owes money to people. I think these people are mainly China. They have lent Greece money (rather a lot of it) and they thought that Greece would pay it back, plus some more money, which is called "interest".

Greece can't pay it back because they have spunked it on buying votes for the government, by telling people everything is wonderful and they can retire at 55.

There were two options. The sensible one would have been to say "whoops" and then the people who lent the money would have gone "oh bollocks" and that would be that. The value of your investment can go down as well as up.

The second option, which is a bit daft, is the one they chose. Greece (via the EU) say "look, if you voluntarily accept a 50% haircut, we'll pay you back." This means that for every Quid/Euro/Drachma/Yen/ChineseThing the people lent them, half of it goes in the bin, and Greece will, one day (snork) pay back the other half, with interest. And the interest rate is HUGE.

They key is voluntary. Without voluntary Greece is bankrupt and under the rules of bankruptcy the lender can either fuck off or take the whole of Greece and ship to to China or somewhere. Expensive. Not worth it.

Here is the bit I have trouble with. Having done this haircutting, instead of Greece being about 60% short of being able to pay, they are no only 20% short.

So they're fucked.

Hope this has been of interest to one and all.