The last days including the Greek referendum just confirmed some of my assumptions and made things far clearer:
1. The Greek nation is sick and tired of the ongoing austerity measures. The bailout was obviously asking for more cuts. So it was a No-Go.
2. The current level of Greek debt is unsustainable. Even if it was not the case at the beginning of the year it just became such after the long stalemate.
European politicians will surely be unhappy with the vote but have to respect it. They can agree on some more reductions but in the end:
1. More European countries will use this precedent as the base for making their case. I would compare this to opening the Pandora Box for the EU as such.
2. There is a growing negative sentiment in Europe towards Greece because of the tough negotiation practices and harsh rhetoric. I must admit this is instigated by the media but that does not change a lot.
For me the later is probably the most important piece of the puzzle. Politicians may agree or not for more favourable bailout conditions. Yet, going against the dominant view among Europeans will be a political suicide so I doubt they will do. So my question to you is:
If the rest of Europe makes its own referendum tomorrow, would you agree to bail out Greece at more favourable terms?