Greece is circling the drain because they've had austerity economics imposed on them. Austerity economics are based on the lunatic notion that taking money out of an economy through pension cuts, reductions in social programs, firing government employees, selling off government assets and privatizing, will result in more money in the economy.
It's like saying taking out the water to prime a pump will result in more water.
The thing is, it's a sham. No one involved actually believes it. It's just a way to impoverish a country so it can be bought at bargain basement prices - after the destruction of labor unions and political parties that might actually defend their citizens from the economic attack.
The only ones to benefit from the aid/loan packages offered are the banks, not the citizenry.
So of course, any progressive or even mildly left-leaning politician is vehemently opposed to taking money away from people on the pretense that instead of sending the economy into a death-spiral, it will somehow help the economy.
Please read The Shock Doctrine by Naomi Kline and Confessions of an Economic Hitman by John Perkins. They go into to describe exactly what you said, in actual practice in countries around the world. For a glimpse of how the failed Friedman economic policies you described have worked in the U.S., take a look at the devastated economies of Wisconsin, Florida, Indiana, Oklahoma, Kansas and my home state, Louisiana. We served as a laboratory for austerity-based Friedman Chicago School economic policies and our state government is practically bankrupt. Exactly as you have described.
Euro banks getting another fat payoff no doubt. Nothing going to Greece.
You just perfectly described neo-liberalism. Ultimately, it is state-sponsored upward redistribution of income and wealth to the ruling class ... on behalf of the ruling class.
Let's take look at just a small portion of the most recent austerity measures:
- Pensions (which have already been drastically reduced) are being reduced again. And just to make sure the people get the message that thinking they have a voice is an illusion, taxes are being raised again. In addition to increased income taxes, the value-added tax (sales tax) is currently at 24%.
By the way, the average pension in Greece is about 700 euros a month ... or $796.64 in U.S. dollars. The 'pension' problem in Greece isn't the amount of money a pensioner receives, it's the huge number of people collecting a pension ... it's the number of elderly in the country.
The austerity that is being forced on the people in Greece is nothing more than systematized, institutionalized torture ... and soon to become genocide due to the economic brutality of the ever-increasing, never-ending austerity measures to benefit the ruling class. At what point in time does it become more humane to dig ditches and dispose of the people in Nazi-style fashion?
This tragic story is a textbook study of capitalism. How anyone can advocate for and support capitalism is beyond my comprehension.
"The elephants in the room are tussling, and the little pipsqueak mouse, Greece, is being trampled upon. This is the truth. It’s got nothing to do with the Greek government stalling on structural reforms. By the way, there are no structural reforms in question. Cutting down pensions is not reform. It’s like confusing butchery for surgery. It’s not the same thing."
former Greek Finance Minister Yanis Varoufakis
The powers that be, the Troika of banksters, is lighting the fuse for disaster just as they have already done with the endless Wars in the Middle East sending thousands of desperate refugees to Europe. As Yannis Varoufaksi warned already the Nazi/Fascist rightwing is on the ascendant all over Europe as ordinary people are burdened by austerity and public cuts for plutocrat profits while teeming masses of refugees try to escape carnage. Ironically Greece has been a major conduit to some safety for Mideast War refugees of all stripes. Like the Weimar Republic in Germany before WW II after the banksters did nothing for the people after the financial crash of 1929 and the Great Depression, so the ruling class thinks they can continue to extract endless profits from the people. The choice will be socialism or fascism. tragically as with Trump in the USA, Fascist tendencies dividing the people's victims against each other are on the ascendant rather than the 99% vs the 1%.
But the elite cannot tame this tiger..