Answer is no to default but allow Greece debt relief in a structured way. Greece's debt burden is over 170% of GDP which is unsustainable for Greece but a relatively small amount for the EU as a whole to manage. Remember Greece accounts for less than 2% of total EU GDP so whilst painful for the Greeks on a pan European basis is insignificant.
The Germans have short memories to their shame. It was debt relief granted in 1953 and partially funded by both Spain and Greece which allowed Germany to get back on their feet.
Default and removal from the Euro will cause much greater problems than the cost of debt relief.
There is growing concern they are pushing for the exit option, when a group are made to suffer to the point they have nothing else to lose is it any surprise they opt for the 'exit' option. As legal or otherwise as 'exit' is, there is concern foremost not that a domino effect could begin but that a scrabble to not be the next whipping boy will ensue. Then it's political favours between Spain and Portugal (amongst a couple of others) to cash in/buy a few favours so that toxicity isn't dumped on them to the extreme a la Greece.
In my simplistic view, this is progressively becoming a battle to draw the line between the haves and have nots and then to enforce that line very literally, very physically so as to keep the poorest out of the social cares and mechanisms so that the have's no longer have to support them as well as the millions allegedly on their own doorstep they have no means to ostracise.
If I was a Greek, I'd be hounding the politicians and economists that played Russian Roulette with the gun at my head instead of their own but were drunk with the power of it instead of being focused on the winning of it. IMHO there is a sizable revolt coming in Eastern Europe that will result in a lot of harm, the Russia Ukraine standoff is the tip of the iceberg.
