Buddy, Can You Spare a Quadrillion Drachma?

Here they go again:

Whether European leaders accept the Greek government’s application for more emergency loans at a crisis summit Sunday still depends on Prime Minister Alexis Tsipras making a drastic turnaround on pension cuts, tax increases and other austerity measures after five months of often-acrimonious negotiations.

“The actual examination can only begin once the full package has been put on the table,” said a spokesman for German Finance Minister Wolfgang Schäuble, who has pushed a hard line on Greece and made clear that Germany is prepared for a potential Greek exit from the eurozone.

His comments echo those of German Chancellor Angela Merkel, who said Tuesday night that a new three-year aid program for Greece would require measures—including changes to labor laws, product markets and the privatization of state assets—that had been dropped from negotiations in recent months.

The very simple fact is that Greeks are incentivized not to work by their own government, which is incentivized to pay for it anyway by access to cheap euros. This has gone on long enough now that Athens no longer has the ability to even pay the interest on the euros they’ve borrowed, and no ability to print and inflate their way out.

What they’re hoping for is that the Germans will chicken out, fearing that Italy and Spain will go next, and continue paying for Athens’ profligacy. But given Merkel’s new demands, that seems like an unlikely way out.

So Greeks can either endure austerity imposed by their EU partners if they choose to keep the euro, or endure austerity imposed by a collapse in trade and credit if they bring back the worthless drachma.

But it sure looks like austerity either way.