A lesson from Greece in the difference between private and public finance

From today's Open Europe news summary (my emphasis):

Greece to start technical talks with creditors tomorrow amid criticism that too much time is being wasted

Eurozone finance ministers agreed yesterday that officials from the Greek government and the EU/IMF/ECB Troika will on Wednesday start technical discussions on the implementation of the first batch of reforms proposed by Athens. The talks will take place in Brussels, although Eurogroup Chairman Jeroen Dijsselbloem told the press, “In parallel, as needed, technical teams from the institutions [the Troika] will be welcomed in Athens, with a view to support this process.” Speaking after the meeting, Greek Finance Minister Yanis Varoufakis confirmed that officials from the three institutions would travel to Athens if needed, but said, “The idea of Troika visits comprising cabals of technocrats in lockstep walking to our ministries and trying to implement a programme which has failed…that is a thing of the past.” According to sources quoted by Bloomberg, ECB President Mario Draghi put pressure on Varoufakis to let Troika officials visit Athens in future.

This is an object lesson in the difference between private loans and public loans. Private lenders risk their own money and require remedies for nonpayment that are enforceable in a court of law with practical means of collecting. In other words, private lenders make sure that courts will aid them in attaching and liquidating assets in order to satisfy unpaid loans. But public lenders are not lending their own money; nor do they ensure that they have collateral that can be liquidated for nonpayment. In effect, lenders of public funds buy unsecured bonds using other people's money from judgement proof creditors.  Far from sovereign debt being credit of the highest quality, from a strictly financial standpoint, it is the worst when viewed from the ability of the creditor to collect. It appears that the new socialist Greek government has figured this out.