If the Greeks have not paid their previous loans, how are they supposed to pay the recent ones? Although they have been austerity measures here and there but how much can you cut until the citizens become openly rebellious or the state crumbles? Technically default should start if they are unable to pay interest or roll over but whatever language you apply, if you are unable to pay on time, then it is a default, although the European Union is trying to devise a plan to extend the maturity time of Greece’s debt without calling it a default, but the markets will see it otherwise. If you have been used to partying for a long time, it is hard to not party.
But that is exactly what is happening in Greece and it is very hard. But default should be an option otherwise you keep on supporting somebody in the hopes that by some miracle they are going to pay you back but it does not and will not happen in the case of Greece. And the same thing is now playing across the pond in the United States where there is crucial crunching time to come up with a solution to increase the debt limit, otherwise the U.S. will default (although they can figure out some way to pay their obligations). Here is the same thing that by increasing the debt limit, they are again piling more debt to the already enormous one.