Creditor and judge over Greece: when countries go bankrupt

[unhappycamper]

http://www.dw.com/en/creditor-and-judge-over-greece-when-countries-go-bankrupt/a-18561910

Insolvency protocols for sovereign states are lacking. The failed negotiations with Greece have shown that without such plans, or some form of debt relief, there will be no end to the Greek drama. Andreas Becker reports.

Creditor and judge over Greece: when countries go bankrupt
Andreas Becker
04.07.2015

When a business or an individual files for bankruptcy, the ensuing insolvency process is clearly regulated by law. The case is presented before a judge, and a neutral entity - not the incensed creditor or creditors - decides what steps are to be taken from there.

That is not the case with Greece. Here it is the creditors themselves that are judge and jury over the debtor. Creditor nations are desperately trying to protect their own interests, while at the same time labeling their actions a "rescue," in an utterly toxic conversational atmosphere full of distrust and accusations.

The philosopher Jürgen Habermas sees the shortcomings of European politicians on display in this situation. Recently, in an article for the German daily newspaper "Süddeutsche Zeitung" he wrote: "They look like politicians, but the words they speak are dictated solely by the economics of their role as creditors."

Resistance from the banks

The failed negotiations have shown just how problematic these multiple roles are for EU member states: As creditors, they want to force the debtor to enact certain budgetary cuts, while at the same time controlling the implementation of those cuts.