I don't see how the two main consitions of the treaty, having a VAT (sales tax) on the islands and moving retirement age from 60 to 65, were unsubtainable.

First of all, more VAT will decrease tourist dollars spend. It will decrease economic activity. Decrease GDP.

Second, when you suddenly tell people who don't have a job (remember, unemployment is already high in Greece, especially among the youth) that they need to find one, it leads to a further strain on employment, and societal tension.

And remember, pensioners spend money. The money may come from the government, but it goes into the economy. If this money isn't going back into the Greek economy, the GDP decreases.

These measures will only increase unemployment and decrease GDP further. Exactly the opposite of what Greece needs. It may seem like a small thing, but on a macro scale, small changes add up.

I think it's fair for the islands to have the same level of taxation than the mainland. Greek islands shouldn't exist to be the gateway to tax evasion.

Pensions are money taken from the working classes and the capital, it doen't magicaly create GDP. Again, it feels fair that a country way poorer per capita than the US or Germany should at least match their retirement age to those country.

Corruption, red tape and over spending are the reasons why Greece is in bad shape.

Costs of doing business in the islands are higher than the mainland, transportation and all.

Under the EU program, money taken away from the working classes goes directly to creditors. Better to give to pensioners, who did 'earn' it, based on their understanding during their working years, and at least return it to the economy.

And no one should work as much as Americans.

And finally, you can't change society overnight. Corruption red tape and over spending exist everywhere, even the US. You can't simply crack down because then capital flight occurs. There's an entire category of economics that deals with this (development economics). It's always a balancing act.

There's many reasons for the Greek crisis, its all too easy to apply moral judgement to a very complicated issue.

Edit - the concept of 'fairness' also has no place in economics. That's for politics or religion. Economists try to achieve the best outcome, not try to decide what's 'fair'.

The debt/GDP ratio is not really important. The more important figure is the percentage used for debt/interest service in relation to the GDP. This figure is actually quite low since the loans handed out by the eurogroups are extremely favorable. They effectively constitute a haircut in all but using the word.

I sincerely doubt that the creditors will backpedal. One of the primary problems with getting a deal is that any deal they could get would need to be approved by the german parliament. The german parliament went into summer break at the end of june and won't return until end of august. The other problem is that the greek negotiation tactics burnt a lot of bridges. I sincerely support their cause, but I can't see them make any more headway than they did before. They're proclaiming results within 48 hours - if that's not delusional I don't know what is.