To highlight the current Greek government's role in worsening that country's fiscal situation, one can turn to the IMF's just-released debt sustainability analysis. The analysis notes:
1. Had Greece implemented the fiscal aid-restructuring program as assumed, no additional fiscal aid beyond the November 2012 package would have been needed. (p.1/p.2 of the .pdf)
2. Significant policy changes and Greece's outlook since early this year have substantially increased Greece's financing needs. (p.3/p.4 of the .pdf)
3. The current Greek government has given "vague commitments" about some of the measures required to recapitalize banks and "stated their opposition to further privatization of key assets." (p.4/p.5 of the .pdf)
4. There has been a "substantial weakening in the delivery of structural reforms and in the reform commitments." (p.5/p.6 of the .pdf)
The big policy changes referenced to early this year are the result of the Syriza government headed by Prime Minister Tsipiras. The current government has not been delivering on prior commitments, has not shown much appetite for reform, and has made only vague commitments on some of the issues required to keep the country's banks both liquid and solvent. At the same time, it expects--actually demands--that others accommodate it for its departure from the tasks necessary to help Greece begin to improve its finances.
Debt relief is necessary. But the benefits of debt relief would be eroded, possibly substantially, were debt relief offered to the current government. Given its conduct since taking office--the current government has abandoned Greece's difficult but necessary reform efforts--it is difficult to view it as a reliable partner to any high-stakes deal. Ironically, that path has increased, not decreased, the amount of austerity expected. In short, the current government could merely use the debt relief as an excuse to avoid further reforms.
Now that the IMF has published its report, which highlights significant departures from the reform path undertaken by the Syriza government, I can fully understand why the EU/ECB/IMF have taken a tougher line with the current Greek government. Its credibility was lost well before Prime Minister Tsipiras decided to blow up the negotiations expecting (irrationally) swift European capitulation to his maximum terms.
Can the current government be expected to honor any obligations it makes in the future? Its past performance with the commitments it has abandoned suggests it can't. Therefore, not only would an optimal outcome result in a new Greek government's taking office sometime after the referendum, such an outcome might be necessary for the kind of debt relief Greece urgently needs.