Sure, but the only way they can pay, is by borrowing more, it is just a vicious cycle that will eventually pop... The point is no one wants the bomb to blow up

Sure, but the only way they can pay, is by borrowing more, it is just a vicious cycle that will eventually pop... The point is no one wants the bomb to blow up on their hands, and I get that, but meanwhile the situation in the country gets worse and worse... in the hopes that somehow the country generates more money. Here the "ideology" starts taking place in the discussion, there are proponents of austerity, saying the confidence generated by always paying out-weights the short term losses, and there are people that say it doesn't work, and that we should somehow try something different since this strategy has been tried and failed a couple of times already. Like, hey let the guys off the hook for part of their debt (lenders knew the risk...), and let the blow generate economic pressure for growth (e.g. Get out of the euro, and let the newly minted and devalued currency be extremely attractive to buy stuff out of Greece, making their economy move).