Greece does not have a liquidity problem-it is insolvent. Without transfers of wealth from richer states like Germany and France to retire significant amounts of its sovereign debt, Athens must restructure its bonds-essentially default on significant portions of its obligations to bondholders.
Germany and France are at wits' ends, because their banks hold a good deal of that debt and would take big losses, and other poor EU governments would likely follow Greece's lead. Paying off Greek creditors may be distasteful, but covering the problems of all the EU governments in trouble is beyond the capacity of Germany and the other richer EU states.
To patch things over for another year, Berlin and other rich governments want Athens to impose more cuts in government benefits and wages in exchange for more loans and relatively small private creditor haircuts. And they want Athens to sell off valuable state-owned assets to help lubricate the deal.
The Greek people have already taken major cuts in benefits and salaries, and they understand gradualism is not solving the problem. They shouldn't want their economy bought up by the Germans and others, and they are correct to expect their government to consider other, more reasonable solutions.
The amount of aid the Greek government will receive through current negotiations will likely result in another crisis next year or the year after, and then more cuts in benefits and wages. Importantly, these deals do nothing about private debt-the mortgages, auto loans, and credit card balances Greek citizens are expected to pay as their salaries are cut and cut.
As European integration progressed-for example, with the 1992 Maastricht Treaty that harmonized taxes and product standards, and the 1999 introduction of the euro-European voters in poorer states increasingly expected health care, job security and retirement benefits on a par with the richer states. Civil servants expected to be more adequately compensated-yes "adequately" because examination of Greek salaries does not reveal payments that are very generous by German or French standards.