The Eurozone is under an extreme pressure due to the fact that several of its member states lied and cheated about their financial status. Especially Greece's national deficit is so high that they are border lining bankruptcy eventhough last year a large financial injection has been given to this country.
When Greece would slide down into a bankruptcy where they can no longer pay of the interest of their massive loans it will cause investors to withdraw and doubt to invest in European stock. Causing a major recession in the Eurozone. So having to bail out Greece is a necessary evil in order to damage control but certainly no solution when Greece doesn't reorganize its country.
The best solution economist think is to provide remission of debt to Greece. It would indeed help Greece and the Eurozone but here's where the psychology (rightly so) comes into play.
For countries like my country where we have to work till age 67, where we pay extreme amount of taxes and extra charges it feels highly unfair that another country where the civil servants earn vulgar salaries have sorts of ways to avoid paying taxes and have been lying and cheating to provide remission of debt to them. It doesn't do any moral justice to hardworking, Dutch, German, Belgian, Finnish and Austrian people. When you provide a remission of debt then the necessity to Greece to restructure their country and take all sorts of unpopular measures far less stressing and we will be in the same problem 5 to 10 years from now.
The psychology form the Greeks is also understandable they have been living like this for decades and suddenly their pension age goes up, VAT is increased significantly, if that would happen in my country as a company I would pack my bags and move out.
They will all probably get sever tax audits and be sure to made to pay. So suddenly for the Greeks its a lot harsher and they will obviously fight against these impopular (but necessary) changes.
Another option which we do not really hear a lot about is for either the European member states to kick Greece out of the Eurozone or for rich member states like The Netherlands, Germany and Finland to get out of the eurozone. Ironically the fines you have to pay for leaving the Eurozone come painfully close to actually giving the money to Greece.
From a social point of view saying to Greece: "Hey buddy, too bad but you are on your own!" would be the only good thing. That is after all what tax offices and countries say to their citizens who can't pay their taxes as well. It is weird that when economy and politics get a hold that the method of linear and social thinking is disrupted.
This causes extra grieve with the citizens of the major countries (Germany, Holland and Finland) having to provide the bail out because their government will put extra tax measures or savings on their people.
I would be in favor to chuck politics over the wall and simply kick Greece out on the bases of gross misconduct and let them fence for themselves. You got yourself into this mess, we helped you once, now get out yourself out of this mess. Simply because this is how sociology and psychology it would work with individuals as well. Sure the matter is more complex and we do not know what would happen economically when you kick a member state out of the eurozone -- the great unknown is a big fear for politics. However it is ironic that as a whole country you can misbehave more than a single individual is allowed to.
It is ironic to see that politics and economics are mere games that rub against the normal moral structure of sociology and psychology perhaps in a world of reason there's no place for economics because after all, when Greece goes bankrupt the funds in the rest of europe are still stable its all psychology that makes investors think otherwise. Pushing in more money actually gives private sectors a lot more to lose when Greece falls over -- which it will because their social psychological structure can not be changed in mere years.
This will be a problem that will continue to reoccur as long as there are no impopular measures being taken by politicians against nations who's national deficit is too high.
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