This is banker stupidity. Euro banks - mostly German - wanted to throw loans around like candy but never be forced to take the pain when any of those loans defaulted due to their own ridiculously incompetent risk analysis.

Banks should be forced to write down the loans rather than attempting to "make" Greece pay. There is nothing to "make" -- they already tried one round of austerity and Greek GDP collapsed more than the austerity measures. And England's economy should also point out the fact that austerity does nothing.

Bottom line is the banks must write down their debt to zero, and this whole charade is simply delaying the inevitable. The ideal outcome for the Greek economy is to repudiate the debt - default, and force the banks to mark it to the market price of zero. Iceland and Argentina's economies are doing great after they repudiated their debts and told the banks to pound sand when they kept coming back to "attempt" to force a nation to pay someone else.

It's got nothing to do with wage levels - in fact the wages of workers should be increased to allow for consumption to exist. Can't squeeze blood from a stone.