While this is a consistent position that has historically been held by some, it's incompatible with any modern economy. In particular it is incompatible with the modern concepts of old-age pension, health insurance, unemployment insurance etc.
The german and french bankers should not have bought greek government bonds at the prices they did considering the greek levels of public debt.
Anyway, what is deemed risky is highly subjective and easy to see only in hindsight.
What is ugly is when foreign states impose non-sensical demands of another country as part of a move to bail out their own banks.
The real question is: why is Greece not going the democratic way of defaulting on its external debt? And the answer is, as you know well, that Greece wants to continue receiving all that sweet EU money. Why stop a good thing?
... impose non-sensical demands ...
Iceland (the country, the government) was not in much debt and did not default. Icelandic banks did default and went bankrupt. The banks (Kaupthing, Glitnir and Landsbank) were split so that Icelandic debts and assets were moved into new surviving publicly owned domestic versions of the banks, and the foreign remnants of the banks were placed into receivership and liquidation.
Russia, the country, actually defaulted. Russia is today not known as a safe place for investments (though the history of a default is just a small part there; in Russia's assets, it has huge energy reserves, and in its liabilities, it has kleptocracy, corruption and an arbitrary justice system).
[1] https://en.wikipedia.org/wiki/Sovereign_default#List_of_sove...