Greeks voted to default.
Both alternatives were bad but staying was the better choice. Greece reminds me of my native Argentina.
Greeks vote for easy political solutions of poor economic outcome. Both Argentina and Chile had over borrowed in 2000, Argentina chose to default. Chile did not. 15 years later we can see that Chile did much better. Argentines, who as Greeks today, also celebrated default as an act of patriotism, ended up struggling more than Chile who paid its creditors.
Recently Argentina went back into default. Few want to invest, Argentina is still an international business pariah. Chile instead, is the economic star of South America. Tsipras said he asked for a “No” vote so Greeks could negotiate better terms to stay in the euro. Greeks believed him.
They will soon learn that they were deceived. Greece will run out of euros, leave the euro and go through much more pain than it would have gone had they voted yes. Argentina still has runaway inflation, currency controls, and a fractured society of haves and have not. Exchanging pesos to dollars is still illegal, Argentines live in fear of their savings being once more raided by the government, as it will probably happen this week in Greece.
And this is in spite of having an incredible commodity export capability unavailable to Greeks. Greece has little to export other than tourism. A devaluation will attract cheap tourism, something that Greece doesn’t need. Greeks will work harder to make less euros. Not a bright future ahead.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars