They are effectively paying off the interest of one credit card with another credit card as well as financing the Greek economy (1.8b for debt, rest for government expenditure). The hole gets deeper, what they are a doing is extending credit to kepe them afloat, this strategy is really only effective if there is some hope that a financial recovery can occur, the debt Greece has is simply beyond the financial reality of what their economy can ever hope to sustain, Hence extending them further credit is simply flushing more money down the drain. The EU either needs to cut Greece loose or simply excuse the debt, however excusing the debt simply won't occur in the current situation as it doesn't give Greece any incentive to fix the mess they have created.

they dont need fresh money for running the government, they only need fresh money to repay loans. 

so we are lending someone money this month so he can repay what we lended him last month, not good, but better than not lending him the money and lose the money.   

the EU should have lended greece the money again, greece has the best goverment since ages to make reforms.

but the imf and merkel demanded idiotics reforms that wouldnt have worked anyway.

greece needs a lot harder laws against illegal tax evasion.  best would be hard labour for people who evaded more than 1m/y, and they need to cut military spending.   that would realy HELP, cutting pensions from 400 to 300 euros per month will not work, it just kills the economy because it kills the consume.

No will win because the EU has said the offer is not valid anymore.A yes vote would not change anything at this point.

You won't end up in the same place. Greece was going in the right direction and had quite some economic growth last year (fragile growth, as was proven) and a small budgetarry surplus before interest payments. But after the election on Syriza, all trust was gone and the Greek economy had gone back into recession.

In the short term, a bankrupt will lead to an economic depression. But on the long term it's impssible to predict, you guys could end up as a third world country if things really go bad.

The offer is still on the table. But unless the Greek government accepts it, they will not be given any more money from the institutions after june 30th.

Merkel and Co are doing far more than they should already, the responsibility is on Greece to present something that the EU can agree to not for the EU to find something that the Greeks find acceptable. good government or bad government, the economy with current debt is beyond salvation a lot of pain is going to need to be felt at all levels in greece, loaning money to pay the loans only prolongs a bad situation, something drastic has to change in Greece and pouring more money into the situation is not the answer.

Merkel and co are making it worse because they want retared reforms that cant work.  cutting pension for those who are happy if they can pay the waterbill will not help repaying debt, but thats what merkel and the IMF want.

and why should greece change after a default? they dont need new credits if they stop repaying the old credits. 

After a default, the banking system will collapse, people with money in those banks will be unable to get the money, businesses and government will be unable to get credit except at exhorbitant interest rates, on top of that it would likely require an exit from the euro dollar and give huge inflation to the local currency making imported goods completely unaffordable. If you think the current situation is bad it will be like a summer picnic compared to the economic mess from a default.

most greeks dont have "money" on the bank left. sure they will lose some money, but nothing they cant survive or that realy hurts.

business will get MORE credits 1 year after a banking crash then without.  the banks are zombies, they cant lend anything as long as they dont default, and they all will default if the government defaults.  a the greek government doesnt need new credits if they stop repay the old.

having a weak currency is realy helpfull if you want your gdp to grow and to export more, and most greek people cant afford importe goods anyway.

inflation isnt that bad, its much fairer than just cutting social benefits and pensions.

a default would help greece in the shortrun, there wouldnt be more pain.

Sorry but no. you don't seem to understand how the financial systems in place work. a default would probably be a great long term outcome, it would be a disasterous short term one. it isn't just people's money that becomes inaccessible. think about all the businesses, they can no longer access money or credit to pay staff. People no longer have money to spend on anything except essentials sending many businesses into a spiral of bankruptcy. Short term would see a massive spike in unemployment as well as crippling financial restrictions on much of the population and a mass excodus of investment (that part is already happening though). Think of the effects of lehman brothers but magnify them as there won't be a government to bail them out.