[i_don_t_know]

But what happens if you forgive 50%, 60% or even 100% of all Greek debt? Sure the Greeks have some breathing room and don't have to pay crippling interest for a while. But it won't fix the rampant corruption, nepotism, mismanagement, tax evasion, and downright fraud that seems to be quite systemic in Greece. At least that's the impression that I have, maybe incorrectly and unfairly. I don't know.

But the point is, if you forgive the Greek their debt, how do you know that they won't return to their old ways and ruin their country yet another time? How do you know that you won't have the same problems again 15-20 years down the road? And should you bail them out again then?

I'm not saying the proposed solution is great. It's not. But my impression is that the Greek are hemming and hawing, and doing their best to avoid any structural reforms that would prevent such a crisis from happening again. They don't seem to take responsibility for their mismanagement and they don't seem to see any reason why they should change their behavior. They put band aids on some parts and the people suffer, and the creditors are partly to blame. But no one seems to be interested in getting rid of the systemic issues like corruption, tax evasion and fraud.

I think that's the difference. The creditors don't trust the Greeks to fix their country because they don't seem to think any of it is their fault. But the creditors did trust Germany to fix its problems after WW2.

EDIT: replaced "debtor" with "creditor".

[leereeves]

Why would anyone lend to Greece again after debt forgiveness?

(Nitpick: the Greeks are the debtors.)

[nickik]

If they can reform their politcal system and people belife it to be sound, they should get money again.

[leereeves]

I agree, but the comment I responded to suggested they wouldn't do that, they'd get loans again despite not reforming, and this crisis would happen again.

It seems to me that if anyone loans money again to an unreformed Greece, they've accepted that risk.

[nickik]

I agree. The most important thing is to make the RULES clear for the future. But eurocrats don't seem to understand this.