GREEK cities were filled Sunday night with cheering supporters of the victorious Oxi ("No") camp in the referendum on the bail-out terms demanded by the country's European creditors. Many believed they had launched an anti-austerity revolution that would soon sweep the rest of Europe.

In the rest of Europe, such a revolution did not seem to be on the way. Across southern Europe and in France, where demonstrators had rallied in Paris to support the "No" vote, some sympathised with Greece's plea for solidarity; but others wondered why the Greeks feel entitled to special treatment.

Meanwhile, in Germany and northern Europe, the "No" vote seemed only to have reinforced the conviction that Greece should be left to its fate. As Angela Merkel, Germany's chancellor, and François Hollande, France's president, prepared to meet Monday evening to discuss offering Greece one more chance, their countries were split by the divide. – The Economist, July 6, 2015

News stories about the Greek crisis constantly return to a familiar refrain. The country's politicians and citizens alike borrowed unwisely, spent too freely and now don't want to pay their debts.

This impression isn't wrong, but it misses half the story. Loans are always two-way transactions. One party lends and the other one borrows. Both sides take risks and both sides receive benefits.

Lenders know – or should know – that it is always possible the borrower could default. They are supposed to assess that risk and lend only at interest rates that compensate them for taking it. Portfolio managers who hold many loans should diversify to minimize the risk of unmanageable simultaneous defaults.

This means defaults should not bother well-prepared lenders. They know the risks, factor them into the interest rates they demand, and realize that occasional mistakes are inevitable.