Let me first that I like Greece. I always loved Greece since I read the stories of Greek mythology when I was young. Greek hospitality is for me is the standard of civilized behavior. In short, I am quite a fan of Greece.
However Greek had always a weak economy. In earlier times when we only had an European Community the debt was already sky-high. Greece somehow got by but was always on shaky ground. The criteria for being in the Eurozone were strict. From beginning it was clear that Greece would have a big problem with that. However no alarms were ringing. That was strange to me. With a debt so big you would expect closer monitoring. Especially when the olympic games came to Greece (2004). It cost a huge amount of money and I was wondering how that was being paid for. But again no alarm bells went off. It was in the end George Papaconstantinou (october 2009) who had to confess about the true size of his country's debt.
Ever since Europe has tried to keep Greece afloat. We have given the banks that owned Greek bonds a haircut (a nice word for you don't get all your money back) and took the debt to ourselves. We have given them easy terms. The majority of the loans don't need to be paid back yet. In fact most will not be paid back in my lifetime (assuming that everything goes well). The interest rates are super low because we are borrowing it to them and not the investors on the financial markets. I approve of all that even if it means cutting in budgets at home.
So much aid!! And still it is not enough. For months the eurogroup and the Greek government have been haggling over the terms. The Greeks want an end to austerity and we, yes we would like a prospect of getting our money back. Not at the end of century. Sometime sooner would be nice. Do we trust the Greeks to make good on their promises? The answer is sadly no. All Greek governments have tried since 2010 to wriggle themselves out of their obligations. The last government has tried it even more violently then others. It got them nowhere. When the debt is that big your room for independent decision making is rather limited.
What we want is that the Greeks put there house in order. No more corruption, no cheating with numbers, no tax exemptions for the rich. In fact when you actually bother to the read 10 pages of proposals that were on the table when the negotiations broke down, you get the impression that most of these proposals were sensible. Aimed at improving the efficiency of government, removing corruption and slack. In short at putting the house in order. The main problem seems to me the pension reform. That's where it really hurts, but if the talks had continued such problems could have been solved. From reading the document I get the impression that those who said that a deal was close were right. It is very disappointing, reading all this, when talks break down. It is the failure of politics.
We need to able to trust the Greeks. That trust has vanished and it will not return until Greeks have a government that is reliable and accountable for its deeds. When the trust is rebuild we can begin to think about forgiving part of the debt (again). Until that time the debt is a stick that Greece will be beaten with until someone with a sense of responsibility takes charge.
The Greeks will vote next Sunday on a package that has expired by Tuesday. It is a weird referendum. It's a choice between Scylla and Charybdis. If I were a Greek I would stay home.