After months of games and brinkmanship, and only a week after Greek voters rejected the conditions for a €7.5bn (£5.3bn) rescue package, the end came swiftly. The eurozone’s political leaders agreed to start negotiations on a much larger package, worth €86bn , almost half of Greece’s GDP. Unfortunately, the deal reveals Europe’s apparent determination to reenact the same tragedy in the future.
Over the past five years, a whopping €344bn has flowed from official creditors such as the European Central Bank and the International Monetary Fund into the coffers of the Greek government and the country’s commercial banks. But after six months of near-futile negotiations, exhaustion had set in and holidays were beckoning; so the actual conditions for a new Greek rescue were given short shrift. Although the European Financial Stability Facility (EDSF) had officially declared Greece bankrupt on 3 July, the eurozone’s leaders kicked the insolvency can down the road yet again.
The latest agreement did halt, or at least interrupt, the eurozone’s biggest crisis to date, culminating in an unprecedented period of antipathy, opprobrium, humiliation, pestering and blackmail within Europe. Greece came within a hair’s breadth of leaving the eurozone.
The former Greek finance minister Yanis Varoufakis revealed that after taking office, he assembled a group, with the consent of Greece’s prime minister, Alexis Tsipras, that met in secret to prepare the introduction of a parallel currency and the takeover of Greece’s central bank – effectively an exit (or “Grexit”) from the eurozone. Germany’s government also was ready to accept what appeared to be the inevitable. Had the French president, François Hollande, not advised Greece behind the German chancellor Angela Merkel’s back about how to negotiate, events could have taken an entirely different course.
The bitter dispute within the Eurogroup (comprising the eurozone countries’ finance ministers) not only strained relations among the monetary union’s members, but also fueled tensions within national governments. Many European leaders are still smarting and licking their wounds. But this should also be a time for them to reflect on what happened and why.
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http://www.theguardian.com/business/2015/jul/28/greek-debt-crisis-perils-of-lending-to-your-euro-friends-insolvancy 
