Greek default? Who's to blame? Euro viability for weak members?

With all the discussion going on in the press and financial markets, why are creditors surprised this is happening in Greece again?......

First, too much revisionist history.

A lot of people to blame about the NO vote by the Greeks. 50 years of corrupt and incompetent politicians, Greeks not paying taxes and their government turning a blind eye because the politicians and their friends were some of the biggest violators, the EU and ECB for "restructuring" debt to line the pockets of the banks that knew fully well that they were investing in an inefficient and corrupt counterparty, Goldman Sachs for knowing the books were cooked and doing nothing except collecting their fees and bonuses, KPMG and whatever other auditors that were used because they too knew the books were cooked and every bloody banker that lent money to the Greeks with their EYES SHUT.

In 1982, when I first went to Greece to work professionally at a regional office of a U.S. Company serving the Middle East, Africa and Eastern Europe, the banks were on strike the ENTIRE summer. In 2002, over 50% of the workforce were still public (government) employees. AND BANKS STILL "LENT" GREECE MONEY. ALL OF THEM WERE IDIOTS AND DESERVE TO LOSE ALL THE PRINCIPAL OF THEIR INVESTMENT, in my humble opinion.

The amazing thing is that the original bail out plan funneled 80% of the bail out funds back to the European banks that made the bad investments in the first place. It is that decision in my opinion that made the people at the bottom of the ladder in Greece to turn on the troika because all they have felt is the pain of pension cuts, job losses and an economy that has contracted over 25%. (Over 25% unemployment and over 50-60% unemployment for those under 25) Those are depression numbers. An interesting fact, the Greek government is the only source of income for over 50% of the Greek population.

It seems that it is only going to get much worse for the Greeks before it gets better. The banks are insolvent and capital controls, if a deal isn't put together with the troika in the next week that keeps the banks and country liquid, will give a haircut or complete loss of everyone's savings in the Greek banks. Humanitarian aid will be needed very soon if a deal isn't made and the Greek banking system collapses.

Tsipras may have a problem explaining this to his constituents which may lead to cracks in his support, especially since he did a U-turn on Saturday by getting parliament to essentially accept the terms that were offered by the creditors two weeks ago. Only problem here is the loss of whatever credibility still exists for the Greek government and all the damage that has been done to the economy with the institution of capital controls.

Hopefully, all will go well and the weaker members of the Eurozone will support some real reforms in the structure of a bail out. Ultimately, as long as there is such a wide disparity in the strength of different economies in the Eurozone, the weaker members face very difficult times. With monetary levers under the ECB's control, the weaker members only have fiscal flexibility which makes it extremely difficult to expand their economies. The strongest economies in the Eurozone, if the large disparity remains, will keep the weaker members uncompetitive. Currently, the Euro is lower because of weaker members which allows Germany to export more goods at an undervalued currency for Germany but it keeps the Euro strong enough so it places the weaker states in uncompetitive positions. A vicious circle for the weakest members.

The strong members still benefit from cheap labor and services flowing from the weaker states which of course makes them more competitive but does little for the weaker states. The free flow of labor has created issues unforeseen in the Eurozone; problems that don't exist under the North American Free Trade Agreement (NAFTA) which allows for free trade but not free labor movement.

In other words, in my opinion, the weakest members of the Eurozone are going to continue to have significant problems!