The Europeans (and the press) really do like to obfuscate. As Atrios says, “I guess we’ll continue to maintain this fantasy of ‘bailing out Greece’ instead of ‘bailing out people who lent money to Greece.'”

Greece is in trouble because it borrowed more money than it could pay back. From whom did it borrow money? European banks, particularly German banks. No European government lent money to Greece; private commercial banks did. Now, because Greece can’t repay the banks, the entire Eurozone is in danger, and the European taxpayer is being asked to keep those commercial banks whole. It’s the same thing we in the US did, and it angered a whole lot of American taxpayers and fueled the growth of the Tea Party movement.

Atrios concludes “They lend money at a premium for a reason. It’s the risk premium.” Absolutely. And if the borrower fails to repay the loans, that premium should be forfeited by the banks. They’re not entitled to get 100% of their money back.