There was an opinion article in the Guardian yesterday under the title
Spain did not swing to the right, the left collapsed
This article could be very well writte the same by replacing "Spain" in the title by "Greece" or "Portugal".
I uploaded (4 February 2012 9:30AM,Panaretos) the following comment:
The essence of the problem is the question of the article: "Did Zapatero have an alternative?". To this question the author did not provide a concrete answer.
The creditors did not negotiate, and were not willing to negotiate. They dictated their terms and were in a position of strength to do that. (see for example, the negotiations of Greece with the IIF for the PSI. The IMF disagrees with Germany and is proposing terms that are better for Greece than those accepted already by Greece).
I believe that the dilemma for Spain, as well as for Portugal and Greece was: Agree with the terms of the creditors or exit the euro, at least temporarily. The Socialists in the three countries did not put this forward. Not just as a threat (which they did). But as real alternatives with all the pluses and minuses.
What would be the best choice for the citizens in the long run is not clear. Precisely for that reason, the choices should be put forward in a referendum with all the arguments presented and analyzed. Only then, the socialists would be in a position to argue from first principles. Those of democracy.