--- title: "Meaning & Key Takeaway of: Forcing new loans upon the bankrupt on…" description: "\"“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never bail..." image: "https://sms4smile.com/quotes/i/1e2/yanis-varoufakis-10824_austerity_forcing-new-loans-upon-the-bankrupt-on-c_712645.jpg" --- # Forcing new loans upon the bankrupt on condition that they… ![“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never bailed out. With their ‘rescue’ loan and their troika of bailiffs enthusiastically slashing incomes, the EU and IMF effectively condemned Greece to a…” quote by Yanis Varoufakis](https://sms4smile.com/quotes/i/1e2/yanis-varoufakis-10824_austerity_forcing-new-loans-upon-the-bankrupt-on-c_712645.jpg) [Download](https://sms4smile.com/quotes/i/1e2/yanis-varoufakis-10824_austerity_forcing-new-loans-upon-the-bankrupt-on-c_712645.jpg) [Open image](https://sms4smile.com/quotes/i/1e2/yanis-varoufakis-10824_austerity_forcing-new-loans-upon-the-bankrupt-on-c_712645.jpg) > ““Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never bailed out. With their ‘rescue’ loan and their troika of bailiffs enthusiastically slashing incomes, the EU and IMF effectively condemned Greece to a modern version of the Dickensian debtors’ prison and then threw away the key. Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? Bankruptcy and debt write-downs became for capitalism what hell had always been for Christian dogma – unpleasant yet essential – but curiously bankruptcy-denial was revived in the twenty-first century to deal with the Greek state’s insolvency. Why? Did the EU and the IMF not realize what they were doing? They knew exactly what they were doing. Despite their meticulous propaganda, in which they insisted that they were trying to save Greece, to grant the Greek people a second chance, to help reform Greece’s chronically crooked state and so on, the world’s most powerful institutions and governments were under no illusions. \[…\] Banks restructure the debt of stressed corporations every day, not out of philanthropy but out of enlightened self-interest. But the problem was that, now that we had accepted the EU–IMF bailout, we were no longer dealing with banks but with politicians who had lied to their parliaments to convince them to relieve the banks of Greece’s debt and take it on themselves. A debt restructuring would require them to go back to their parliaments and confess their earlier sin, something they would never do voluntarily, fearful of the repercussions. The only alternative was to continue the pretence by giving the Greek government another wad of money with which to pretend to meet its debt repayments to the EU and the IMF: a second bailout.”” [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. The bailout forced Greece into a punitive debt regime, treating sovereign debt like a prison, undermining responsible lending and economic renewal **In simple terms:** Punitive bailouts trap economies and discourage responsible credit Key Takeaway Recognize limits of debt, demand fair restructuring Themes economics politics justice Mood critical concerned Type analytical political When to use this quote - government negotiations - policy reform - public debt management Key Concepts sovereign debt limited liability financial crisis Questions to Reflect On - What alternatives to punitive bailouts exist? - How can accountability be ensured in sovereign restructuring? A Different Perspective Such austerity can deepen recession and social unrest ★ ★ ★ ★ ★ No ratings yet [Austerity](https://sms4smile.com/quotes/about/austerity/) [Capitalism Hell](https://sms4smile.com/quotes/about/capitalism-hell-5617783/) [Condemned Greece](https://sms4smile.com/quotes/about/condemned-greece-5617781/) [Cruel and unusual punishment](https://sms4smile.com/quotes/about/cruel-and-unusual-punishment/) [Debt](https://sms4smile.com/quotes/about/debt/) [Every day](https://sms4smile.com/quotes/about/every-day/) [Financial crisis](https://sms4smile.com/quotes/about/financial-crisis/) [Greece Debt](https://sms4smile.com/quotes/about/greece-debt-1833610/) [Insolvency Did](https://sms4smile.com/quotes/about/insolvency-did-5617782/) [Interest rate](https://sms4smile.com/quotes/about/interest-rate/) [Reform Greece](https://sms4smile.com/quotes/about/reform-greece-5617784/) [Second chance](https://sms4smile.com/quotes/about/second-chance/) ## Related quotes > [Greece's debt is going to be a function of a lot of factors down the road.](https://sms4smile.com/quotes/charles-dallara/greece-s-debt-is-going-to-be-a-function-of-a-lot-of-factors-down-the/) [Charles Dallara](https://sms4smile.com/quotes/author/charles-dallara/) > [“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. 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Banks](https://sms4smile.com/quotes/author/iain-m-banks/) > [By requiring that an execution be relatively painless, we necessarily protect the inmate from enduring any punishment that is comparable to the suffering inflicted…](https://sms4smile.com/quotes/john-paul-stevens/by-requiring-that-an-execution-be-relatively-painless-we-necessarily/) [John Paul Stevens](https://sms4smile.com/quotes/author/john-paul-stevens/) > [By creating false environment of a war on drugs, and cruel and unusual punishment with these crimes, 50% of our U.S. population is in…](https://sms4smile.com/quotes/oliver-stone/by-creating-false-environment-of-a-war-on-drugs-and-cruel-and-unusual/) [Oliver Stone](https://sms4smile.com/quotes/author/oliver-stone/) > [“This felt like being stalked as prey, and he hated that his relationship with Dagger was being exploited for the entertainment of total strangers.…](https://sms4smile.com/quotes/ann-lister/this-felt-like-being-stalked-as-prey-and-he-hated-that-his/) [Ann Lister](https://sms4smile.com/quotes/author/ann-lister/) > [“I promised her we’d be quick, and Ben and I slipped away, just in time to hear Senator Blaine clear his throat and say,…](https://sms4smile.com/quotes/hilary-duff/i-promised-her-we-d-be-quick-and-ben-and-i-slipped-away-just-in-time/) [Hilary Duff](https://sms4smile.com/quotes/author/hilary-duff/) > [I do accept that, with - with respect to those vague terms in the Constitution such as equal protection of the laws, due process…](https://sms4smile.com/quotes/antonin-scalia/i-do-accept-that-with-with-respect-to-those-vague-terms-in-the/) [Antonin Scalia](https://sms4smile.com/quotes/author/antonin-scalia/) > [The Constitution has to be interpreted loosely, otherwise it becomes a straitjacket. You can't interpret it literally. You can pretend to, and go digging…](https://sms4smile.com/quotes/richard-posner/the-constitution-has-to-be-interpreted-loosely-otherwise-it-becomes-a/) [Richard Posner](https://sms4smile.com/quotes/author/richard-posner/) > [In Western Europe and North America some things are better than they were - at least relative to their moral nadirs - such as…](https://sms4smile.com/quotes/catherine-wilson/in-western-europe-and-north-america-some-things-are-better-than-they/) [Catherine Wilson](https://sms4smile.com/quotes/author/catherine-wilson/) ## More by Yanis Varoufakis > [“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never…](https://sms4smile.com/quotes/yanis-varoufakis/forcing-new-loans-upon-the-bankrupt-on-condition-that-they-shrink/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Larry Summers is one such rare insider. His question to me was in fact an invocation to reject the lure of the outside. Underpinning…](https://sms4smile.com/quotes/yanis-varoufakis/larry-summers-is-one-such-rare-insider-his-question-to-me-was-in-fact/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [The many refugees are not a Greek or German problem. They are a European problem. We should therefore develop a common strategy. That's why…](https://sms4smile.com/quotes/yanis-varoufakis/the-many-refugees-are-not-a-greek-or-german-problem-they-are-a/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“If you cannot imagine walking out of a negotiation, you should never enter it. 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But bitterness is widespread. Currently the Germans hate the Greeks and the Greeks hate the Germans. The demonization of the…](https://sms4smile.com/quotes/yanis-varoufakis/germany-is-europe-s-heart-but-bitterness-is-widespread-currently-the/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [I don't believe a Brexit will hurt the City of London as one of the largest financial centers in the world.](https://sms4smile.com/quotes/yanis-varoufakis/i-don-t-believe-a-brexit-will-hurt-the-city-of-london-as-one-of-the/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Whenever a politician in the know gives a journalist an exclusive in exchange for a particular spin that is in the politician’s interest, the…](https://sms4smile.com/quotes/yanis-varoufakis/whenever-a-politician-in-the-know-gives-a-journalist-an-exclusive-in/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [European Union partners never said European Union partners're going to renege on any promises, European Union partners said that European Union partners promises concern…](https://sms4smile.com/quotes/yanis-varoufakis/european-union-partners-never-said-european-union-partners-re-going/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“When inordinate weight is loaded onto a flimsily constructed bridge, the weakest beam will break first.”](https://sms4smile.com/quotes/yanis-varoufakis/when-inordinate-weight-is-loaded-onto-a-flimsily-constructed-bridge/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Most Europeans like to think that American bankruptocracy is worse than its European cousin, thanks to the power of Wall Street and the infamous…](https://sms4smile.com/quotes/yanis-varoufakis/most-europeans-like-to-think-that-american-bankruptocracy-is-worse/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis,…](https://sms4smile.com/quotes/yanis-varoufakis/austerity-is-a-morality-play-pressed-into-the-service-of-legitimizing/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) [Explore all 63 Yanis Varoufakis quotes ](https://sms4smile.com/quotes/author/yanis-varoufakis/) ## More Austerity quotes > [Mainstream economic theories popular in the last several decades have tended to downplay the government's role in markets and to increase skepticism about even…](https://sms4smile.com/quotes/mariana-mazzucato/mainstream-economic-theories-popular-in-the-last-several-decades-have/) [Mariana Mazzucato](https://sms4smile.com/quotes/author/mariana-mazzucato/) > [“It was my good fortune to be linked with Mme. Curie through twenty years of sublime and unclouded friendship. I came to admire her…](https://sms4smile.com/quotes/albert-einstein/it-was-my-good-fortune-to-be-linked-with-mme-curie-through-twenty/) [Albert Einstein](https://sms4smile.com/quotes/author/albert-einstein/) > [I believe that if we are able to, obviously we need to ensure that we have a robust budget that's balanced, but there's no…](https://sms4smile.com/quotes/jagmeet-singh/i-believe-that-if-we-are-able-to-obviously-we-need-to-ensure-that-we/) [Jagmeet Singh](https://sms4smile.com/quotes/author/jagmeet-singh/) > [“South of Larissa the landscape began to change. Jude watched an irrigation machine like a giant stick insect creeping over a field, and a…](https://sms4smile.com/quotes/paul-alkazraji/south-of-larissa-the-landscape-began-to-change-jude-watched-an/) [Paul Alkazraji](https://sms4smile.com/quotes/author/paul-alkazraji/) > [Too many politicians seem to reach for 'infrastructure' as the default answer to investment, as if roads and bridges were the answer to everything.…](https://sms4smile.com/quotes/mariana-mazzucato/too-many-politicians-seem-to-reach-for-infrastructure-as-the-default/) [Mariana Mazzucato](https://sms4smile.com/quotes/author/mariana-mazzucato/) > [The flaw in, say, austerity, is that its success is predicated on the relative exactitude of math rather than the shifting, liquid imperfection of…](https://sms4smile.com/quotes/steven-weber/the-flaw-in-say-austerity-is-that-its-success-is-predicated-on-the/) [Steven Weber](https://sms4smile.com/quotes/author/steven-weber/) > [You can be creative only when there is abandonment-which means, really, there is no sense of compulsion, no fear of not being, of not…](https://sms4smile.com/quotes/jiddu-krishnamurti/you-can-be-creative-only-when-there-is-abandonment-which-means-really/) [Jiddu Krishnamurti](https://sms4smile.com/quotes/author/jiddu-krishnamurti/) > [It is opposition to economic orthodoxy that leads us into austerity and cuts. But it is also a thirst for something more communal, more…](https://sms4smile.com/quotes/jeremy-corbyn/it-is-opposition-to-economic-orthodoxy-that-leads-us-into-austerity/) [Jeremy Corbyn](https://sms4smile.com/quotes/author/jeremy-corbyn/) > [When people are running up more and more debt for housing, they call that "real wealth." It exposes what's wrong in the mainstream economics…](https://sms4smile.com/quotes/michael-hudson/when-people-are-running-up-more-and-more-debt-for-housing-they-call/) [Michael Hudson](https://sms4smile.com/quotes/author/michael-hudson/) > [“If the surprise outcome of the recent UK referendum - on whether to leave or remain in the European Union - teaches us anything,…](https://sms4smile.com/quotes/alex-morritt/if-the-surprise-outcome-of-the-recent-uk-referendum-on-whether-to/) [Alex Morritt](https://sms4smile.com/quotes/author/alex-morritt/) > [The world has conducted a massive macro-economic experiment since the cataclysm of 2008. In Europe, the fans of austerity have had their chance, and…](https://sms4smile.com/quotes/eliot-spitzer/the-world-has-conducted-a-massive-macro-economic-experiment-since-the/) [Eliot Spitzer](https://sms4smile.com/quotes/author/eliot-spitzer/) > [We used to be one of the richest countries in the world, but we are now on a path towards under-development. This austerity that…](https://sms4smile.com/quotes/marine-le-pen/we-used-to-be-one-of-the-richest-countries-in-the-world-but-we-are/) [Marine Le Pen](https://sms4smile.com/quotes/author/marine-le-pen/) > [The emphasis so far on fiscal austerity, while to a degree necessary for the countries facing market funding difficulties, is excessive when carried out…](https://sms4smile.com/quotes/charles-dallara/the-emphasis-so-far-on-fiscal-austerity-while-to-a-degree-necessary/) [Charles Dallara](https://sms4smile.com/quotes/author/charles-dallara/) > [And what if we’d been utterly open? Made jokes about the first wife? 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With their ‘rescue’ loan and their troika of bailiffs enthusiastically slashing incomes, the EU and IMF effectively condemned Greece to a modern version of the Dickensian debtors’ prison and then threw away the key. Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? Bankruptcy and debt write-downs became for capitalism what hell had always been for Christian dogma – unpleasant yet essential – but curiously bankruptcy-denial was revived in the twenty-first century to deal with the Greek state’s insolvency. Why? Did the EU and the IMF not realize what they were doing? They knew exactly what they were doing. Despite their meticulous propaganda, in which they insisted that they were trying to save Greece, to grant the Greek people a second chance, to help reform Greece’s chronically crooked state and so on, the world’s most powerful institutions and governments were under no illusions. […] Banks restructure the debt of stressed corporations every day, not out of philanthropy but out of enlightened self-interest. But the problem was that, now that we had accepted the EU–IMF bailout, we were no longer dealing with banks but with politicians who had lied to their parliaments to convince them to relieve the banks of Greece’s debt and take it on themselves. A debt restructuring would require them to go back to their parliaments and confess their earlier sin, something they would never do voluntarily, fearful of the repercussions. 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