LET GREECE DEFAULT!!!!!

Greece has been sitting on a massive € 350 billion euro debt. Since May 2010, Greece has been surviving on a first € 110 billion bailout from the European Union and the International Monetary Fund contingent on higher taxes and sharp cuts in government spending. The sixt installment of € 8 billion as part of the 2010 loan agreement of € 110 billion is urgently needed to stave off a catastrophic default. Another rescue agreed on 27 October after marathon negotiations would give Greece an additional € 130 billion rescue loans and bank support to keep it afloat with even harsher austerity measures required as part of that bailout. It would also see banks write off 50% of Greek debt, worth some € 100 billion. All this to keep Greece's debt down (please make a note of it) to 120% of the country's GDP by 2020.

At this stage, the best would be for Greece to default. Default would help Greece by allowing a depreciation (of debt) and by escaping bad austerity measures. While default would hurt some in Europe, namely those who own Greek debt, it would save untold billions of euros in current and future bailout funds that would probably not have worked anyway. Moreover, default would bring clarity to a long-running crisis that has troubled global financial markets for months. Besides, default wouln't be the end of the world for Greece or Europe or the world for that matter.

In several years , once Greece inevitably gets its fiscal house in better order, it's a good bet high-yielding Greek bonds would find an audience with investors willing to take a risk. The interim period would be difficult for Grece, no doubt about it. The institutions holding Greek debt- primarily big European banks, smaller Greek banks and Greek pension funds would take significant hits. And world markets would likely plunge temporarily as investors mulled the long-term impact. But once European leaders faced the reality, reined in the contagion and shifted their efforts to growing problems in Italy and Spain, markets would undoubtedly recover.

The smart thing to do for Greek fiscal leaders would be to channel money saved in a default back to debt holders with close ties to teh Greek people. Namely, the local Greek banks and pension funds. Forcing the big European banks to eat the largest share might help placate Greek citizens who also risk losing their savings in the aftermath of a default. Greece would also no longer be beholden for the next decade to Europe's demand for austerity. The country could forge its own path to some level of fiscal stability, a path that might include the sale of valuable assets such as strategically important Mediterranean ports.