One question that rarely arises about Greece is “where did all those hundreds of billions of Euros really go?” I think most visitors could easily answer that they were not all squandered on pensions and inflated government staffs and salaries. The Greece of 1975 was changed into a simulacrum of northern Europe by all sorts of vast public-works projects — new bridges, port facilities, freeways, museums, light rail, the Athens subway and airport, new agricultural projects, as well as hundreds of luxury hotels well outside Athens and thousands of upscale vacation homes dotting the Greek coastline for 1,000 miles. Suddenly, by around 2002, a Mercedes seemed far more common in Athens than in most cities in California, and yachts in the harbors looked about like those in Newport Beach.
Whether due to Hellenic accounting fraud that masked an enormous rip-off, or a cynical German mercantilism that wanted to sell its cars, trucks, and machines to the indigent whose borrowing was to be backed up by EU guarantees — or to both — a tiny country not particularly known for labor productivity, tax compliance, transparency, or a robust private sector for a moment obtained a glimpse of life as it is lived in Northern Europe.
Germany had done something similar with East Germany, but that pull-up was far more honest and not shrouded in EU double-speak. It was also made easier by the commonalities between East and West Germany and the ability of the West to insist the old East would copy its benefactor — something impossible to replicate in Greece given its hallowed and idiosyncratic culture and troubled history with Germany.
There are only three scenarios likely for Greece: (1) In exchange for debt relief, a liberated Greece changes its ways, opens up its economy, redefines labor and capital markets and becomes a sort of Spain (unlikely). (2) It defaults and its drachma-based country reverts to what one remembered in the old days and what one would expect from a top-heavy, unproductive socialist state (somewhat likely). Or (3) it gets some half-relief, but soon reneges on its promised reforms and austerity, and thus like Greek cities in the 2nd-Century A.D., life goes on as weeds grow among the impressive, but crumbling infrastructure of the past (very likely).