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I bet they find a way to kick the can down the road for a little bit - my bet is a very last minute deal extension - but ultimately, the EU will not survive, not in it's current form, with debtor nations that can't devalue their currency.
I think Greece should leave the EU. Austerity doesn't work and is not right for them, and I can't blame the more responsible parties of Europe for not wanting to pay for others. When you're in a hole, you actually need deficit spending to help get you out of it - i.e. stimulus. Austerity may make Germany happy, but it won't make the Greeks happy.
They need to be off the EU currency and onto their own weaker currency. They'll suffer for a bit, but the weak currency will eventually make things more attractive in Greece from outside investors, and in time they will climb out of the hole. For now they are just stuck.
Everyone who is sitting on Greek debt will just have to write it off, and in all reality, some of the other debtor nations should probably bail on the EU as well. That debt is going to have to be written off at some point, may as well get it over with when interest rates are low.
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