In previous episodes, Greece was promised short term money in order to buy time until they can implement fiscal reforms. In other words, the same people who lent lots of money to the Greeks before, now realizing their mistake, want to Greeks to play nice and raises taxes while cutting costs during a severe recession.
So we have, in one corner: the creditors The French and German banks represented by, mostly, the French and German governments who are, somewhat, represented by the allegedly global (and bank neutral) IMF.
In the other corner, the Greek electorate. Their choices are (a) sacrifice a lot and hope the country begins to grow at some point, or (b) tell the creditors to go to hell, default, devalue and hope the country begins to grow at some point.
As we know, the Greeks keep coming up with new plans every day. As of this weekend, they seem to have found a new untapped resource in the form of a real estate tax which the unions! are threatening to block.
Although we would have never predicted the unions to block a property tax, the outcome is right in line with our expectations. The bottom line is that this is a classic tug-of-war between bondholders and voters. Unless there are invading armies involved, the latter always win. No matter who is at fault, people HATE austerity.
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