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A way to avoid a Total Greek Default
To save Greece from a complete default the following may be worth doing:
- Massive loan from an international consortium - banks and other financial institutions, not just Governments - to enable Greece to invest in UK index funds and Gilts (UK Treasury Bonds) for the (Sterling based) dividends it will receive from these investments over the long term. As Sterling is stronger than other currencies, any income in Pounds will buy multiple Euros, Dollars and others, a good way to increase currency purchases (foreign currency reserves?)
- Put one or two Greek banks under the control of the international consortium and pay it a management fee. As perception is important, Greeks will see their banks being run by businesses that have no liquidity issues and will be more likely to put their savings into those banks, thus making it easier for small businesses to find loans
- Small businesses obtain loans from banks and/or Government, they use this to make capital investments and also to expand, new jobs possibly created so more people paying tax, increased tax-based income for the Treasury, which is then used to invest in public services and small businesses.
- Greek Treasury has all income from long term investments put into accounts managed by the international consortium company (within the Greek banks), a management fee is paid to the consortium, the banks have more cash to use, so they make investments too, and the banks earn more.
- Greece's economy becomes strong enough to be able to take full control of it's banks and Treasury, the banks that are under the control of the international consortium are all privatised, they are listed and all Greeks are encouraged to purchase the low-priced shares in these banks as part of a Government initiative to encourage all Greeks to think about long term investments for income and to fund their retirements, and to reduce any reliance on Government pensions and social security.
- Income in the form of dividends is taxed very low, but this creates an income for the Treasury and if most Greeks have been able to invest in the banks, then it's a lot of tax money going into the Government's coffers. Of course as bank shares generally increase in price many will be sold off so a capital gains tax would make sense, but still it should be very low because the point is to let everyone profit, especially the people.