Reply #5: I don't see it as market's not liking Democracy

[FreeJoe]

If the Greek government had staked out a position of wanting to default on their bonds but then put that decision to a vote, markets would rise. It's not "Democracy" that is causing the losses but the results of Democracy in this particular case.

Personally, I avoid anthropomorphising the market. It doesn't really like, dislike, or fear things. It prices things. A lot of companies are worth less if Greece defaults on its debts. It also raises the perception of risk of other nations defaulting, which lowers the value of other entities.

At the end of the day, the Greeks don't really have many choices. Like an insolvent person or company, they are not going to meet the terms of their debts. They have some options in how much they pay back and under what conditions. They are going to have much less access to credit. That means that they will be facing austerity in some form or another in the near future. They'll live less on borrowed money and either spend less, tax more, or some combination of the two. The other European countries aren't really trying to dictate how the Greeks live. They are just attaching strict conditions on additional loans to Greece. If the Greek people don't want to agree to the deal, they don't have to. They do have to live with the consequences of their governments actions.