“With a primary deficit you’re therefore rather a prisoner of those lending you money. This is why Greece agreed to the last renegotiation of the debt. It didn’t actually solve the problem. For only private sector holders of the debt lost money: none of the official holders did (other EU countries, the ECB, IMF IMF and so on). And so much of the debt was in the hands of the official creditors that near wiping out those private sector ones still didn’t solve the basic problem. Greece has too much debt to ever be able to pay it back. … This all changes when you move into a primary surplus. Sure, you’ve still not got enough money to pay all of your bills. But you can pay the ongoing cost of running the government and the country. The part you cannot pay is the interest on all that money you’ve borrowed. At which point a unilateral default begins to look very attractive indeed. We don’t need to borrow more to pay the pensioners and the soldiers. We’re only borrowing more to pay the interest on what we’ve already borrowed. If we just tell all those we’ve borrowed money from that we’re not going to pay then our budget problems are over.”
Well, we may see how it may go, and what it may happen right after, with no doubt a ‘significant’ reason to re-direct the country towards sanity, maybe what the ballots can not do, the bullets will.