> Greece could've decided not to take up the bailouts, of course. All austerity packages were passed by the democratically elected Greek parliament.
When the elected Greek government put the Nth austerity package to a popular referendum, the EU began cutting Greece off from the international banking system (one effect was that people were unable to withdraw more than a tiny amount from ATMs), in order to put pressure on the population to vote "yes." The population voted "no" anyways, because Greeks were massively against austerity by that point. The EU then put enormous pressure on the Greek government to ignore the result of the referendum, threatening to intentionally destroy the Greek economy. The Greek government caved and agreed to the new austerity package. This was extremely undemocratic: a popular referendum was simply ignored, and the government - which had been elected specifically to reject austerity - basically had a gun to its head.
> The EU would've liked Greece to magically go out of debt, but it's not like they were just going to hand the Greek government hundreds of billions of gifts and a pat on the back with a quick "try not to go bankrupt again, OK?".
If this were an American state, the citizens of the state would have received massive Federal transfers, in the form on Social Security, Medicare, Medicaid and unemployment payments. Instead, the equivalent of all of those things were massively slashed in Greece. This is the equivalent of throwing debtors in prison. In punishing them, you destroy their ability to pay back their creditors. It's an insane thing to do, even from the point of view of the creditors.
What the newly elected Greek government (not the old, corrupt government) was proposing was for the creditors to take a hit, and for stricter tax enforcement (particularly on the wealthy). It wasn't just saying, "Give us money and we'll do nothing." It was saying, "Don't force us into an artificial economic depression, and give us breathing space to reform the corrupt system we inherited."
The Greek government specifically asked the EU not to keep lending Greece money for the purpose of paying back creditors. The Greek government correctly pointed out that the inherited debt was unsustainable, and that you don't lend a bankrupt person money: you force the creditors to take a hit and create a realistic payment plan.
> There are plenty of evil things the EU and its many bodies do, but this wasn't a good example.
Imposing a completely unnecessary Great-Depression-level event on a member state - while running roughshod over that country's democratic system - was pretty evil. Greece went through years of massive unemployment, people's pensions and healthcare were slashed, and young people left the country in droves as practical economic refugees. The reason why the EU took this hard line was that some of the member states (like Germany and the Netherlands) wanted to send a message to the other financially weak states (like Portugal, Spain and Italy). In Germany, there was also a lot of populist politics involved: bashing "lazy Greeks" was good politics, and plenty of politicians made a lot of hay over being tough on the Greeks.