Default, the bond holders still have claims on Greek assets. The involved parties can settle how to pay for the bonds by selling physical assets, by roll over debts pennys on the dollar or by control the national interests like utility, ports, etc.
Austerity: Cut pension, wellfare and government spending which will result in social chaos and possibly war.
Either way, Greek people will face hard times ahead through inflation or deflation.
It is the results of deficit spending. All debtor nations will sooner or later face the same end game.
The better question, what is on the other side of this cycle?
