Greece is what I might call cashflow positive - its government is taking in more money than it's spending in its business of running the country. It's only the bond repayments that are pushing it down.
Government spending should be countercyclical - and smart creditors (which, sure, a government beholden to populism can't always be) would realize that. Prop up the economy now, get growth up again, and then cream off some "repayments" when times are good - I'm sure a contract could be structured to specify that they'd repay their bonds in proportion to e.g. growth above 3%. Running Greece into the ground benefits noone, not even Germany. But sadly, decades on, politicians are still ignoring Keynes.
Or they could have simply defaulted. It's worked out pretty well for Iceland. The argument as I understand it for every nation being perpetually indebted is that it ensures outsiders have an interest in that country being successful - if you own Greek bonds you're less likely to invade Greece. But if your bondholders are forcing a lot of suffering on your country, maybe the costs outweigh the benefits.
Government spending should be countercyclical - and smart creditors (which, sure, a government beholden to populism can't always be) would realize that. Prop up the economy now, get growth up again, and then cream off some "repayments" when times are good - I'm sure a contract could be structured to specify that they'd repay their bonds in proportion to e.g. growth above 3%. Running Greece into the ground benefits noone, not even Germany. But sadly, decades on, politicians are still ignoring Keynes.
Or they could have simply defaulted. It's worked out pretty well for Iceland. The argument as I understand it for every nation being perpetually indebted is that it ensures outsiders have an interest in that country being successful - if you own Greek bonds you're less likely to invade Greece. But if your bondholders are forcing a lot of suffering on your country, maybe the costs outweigh the benefits.