> Greece is a sovereign country Not quite, being a member of monetary union. Of course, it would be better not to have the hybrid that is Eurozone, but that's

> Greece is a sovereign country Not quite, being a member of monetary union. Of course, it would be better not to have the hybrid that is Eurozone, but that's the situation. > If we loan money to Greece, they can simply decide not to pay us back No, they can't. If they would, they would indeed have to leave the Eurozone. (Although, absurdly enough, it was Greece that canceled German debt after WW2.) The disagreement wasn't over whether Greece should pay debt; it was over austerity policies, which in fact prevent growth, and make matters worse. The bad investments have already been made, there is no point in trying to "heal" German banks on poor Greeks inside of what is effectively a single economy (Eurozone). In any case, the decision of ECB to stop liquidity to Greece was obviously political (since ECB itself cannot make that decision). That's what problematic. EU is supposed to be a democracy, and (at least) built on consensus of member states.