The allure of writing off ones debts and freeing yourselves from that yoke that surely you had no part in creating is very powerful. However, sovereign debt is taken out by a government on behalf of the people, so like it or not, you are on the hook for it. Syriza came to power, less than a month ago, on the promise that they would slash Greek sovereign debt and reverse much of the unpopular austerity measures that more sober nations and the IMF believed had to be attached to bailing you out of the mess that you had gotten into. Even the staunchest of Syriza’s hard left would not blame Germany, France or other Eurozone nations for the predicament they found themselves in, but they do feel that their partners are responsible for the hardships that austerity has engendered.
Greece does not want €7 billion in the form of the final tranche of dreaded IMF/EU/ECB Troika bailout money; instead, it wants a bridging loan (for about the same sum) to give it six months of breathing space whilst it bamboozles the rest of the Eurozone into complying with its wishes. As chair of the Eurozone Finance ministers, Jeroen Dijsselbloem, put it, paraphrasing, a rose by any other name would smell as sweet. A bridging loan of €7 billion and a payment under the existing bailout would have the same effect – perhaps nobody in Greece realises that bridging loans attract much higher interest rates than other types of borrowing.
The Greek leadership has been at pains to state that it will not default on its obligations; that it remains open to dialogue etc, but it seems unwilling to do the one thing that will ensure its survival within the Eurozone – live up to the commitments that it freely undertook. It seems clear that the Greek authorities believe that the juggernaut of the Eurozone will not run them down, but when you are playing chicken, you must know when to stop. If Greece were to commit to honouring its pledges yet ask its partners for socio-economic help to cushion the worst hardships of austerity whilst adopting policies that will boost growth and deliver the economic reforms that the EU and IMF demand (in the best interests of the Greek people in the longer term), disaster (for Greece) could still be averted. However, if a democratic people choose to leap over the cliffs of financial Armageddon, we must respect their democratic rights even when deploring their actions.