Latin America has been a great laboratory for studying sovereign debt crises.
In the 1980s, the borrowing countries got pushed around by the lenders (big US banks), agreements were brokered and quickly broken, significant debt relief took a VERY long time to happen.
The countries were strung along with new loans and conditions until the banks had written down those loans to the point where debt relief was feasible for their balance sheets. The countries suffered the proverbial "lost decade" of economic misery.
In 2001, Argentina took another path. They broke their link to the dollar and defaulted on their debts.
After a very steep but short lived economic implosion, the Argentine economy came roaring back. Argentina has since worked to deal with the creditors they burned, and is in no way, internationally isolated.
Greece has chosen to follow the first path. They have been strung along with new loans, new conditions and demands. Their economy is entering its 5th year of recession. And it appears that Germany and France now think their banks can withstand either significant debt write-downs or even a Greek default at this point.
The only question is whether Greece will get real debt relief to go along with all the conditions or whether the EU will just kick Greece off the bus by demanding conditions so stringent that the Greeks will finally say "no mas".
In my view, Greece has been making the wrong choices all along the way. Even at this late date, with the promise of significant debt relief in front of them, it would be better for Greece to get kicked off the bus than to take the deal.
I say that because the deal will continue to crush the Greek economy, and the best case debt scenario arising from it is a 120% debt to GDP ratio in another 10 years or so (i.e. it still won't solve Greece's problem).
It would have been better for Greece to default and devalue 3 or 4 years ago. Their economy would be growing now and they could start making amends and getting back into international capital markets. However, even at this late date, I believe the Argentina option is still better for Greece than continuing to eat Germany's sandwich.