It has been known for quite some time that Greece would default. The bond markets already made that call a couple of years ago.
From what I understand, there are a number of factors at work here but the biggest issue, as has been stated, is political indecision.
Some of this is no doubt down to incompetent and/or spineless politicians. There is no doubt also that the cumbersome and inefficient EU structure is not helping the decision making process.
Whilst it is not mentioned a lot in the mainstream press, I believe the other major aspect is that the decision makers are deliberately stalling whilst they try to work out what to do and what the consequenses of any default will be.
It is all very easy to bang the populist drum, as Katy has done 8), and say ‘get tough on the Greeks’, etc, etc but the fact is that a lot of large financial institutions, both inside and outside the Eurozone, are exposed to this debt. Without careful management a default could trigger a crisis along the lines of the one we witnessed and just about came through a few years ago. There is also the justified fear that, once Greece is sent packing, the markets will turn their guns to Portugal… then Ireland… then Italy… then Spain… by which time we’ll all be in the poorhouse.
Now I’m not in any way defending the politicians. It was they, both in and out of the Eurozone, who got us into this mess with the help of their banker chums. What I am saying is that there are no easy answers here and lots of potential dangers. I can understand their caution.