It is becoming more apparent by the day that Greece will be forced to default on its obligations as it casts about for ways to secure the next and sixth tranche of â‚¬8 billion from the first bail out deal.
At present it is looking like Greece will not meet its EU/IMF imposed deficit target of 7.6% of GDP this year; it looks like it will be more in the region of 8.5%. And remember that the deficit is not the debt. The deficit is the annual overspend, it is the bit that gets added on to the debt pile. So while there's a deficit the overall debt keeps rising, a lower deficit means it doesn't grow as quickly.
Next year Greece has a deficit target of 6.5%, but even with all the cuts it still looks like they will miss this with a figure nearer 6.8%.
This puts the chances of Greece getting its hands on the â‚¬8 billion into doubt meaning that it will have to default. Especially as striking Greek civil servants blocked EU, ECB and IMF (troika) officials from access to the national statistics office so they could not give a proper report.
Should that occur the whole of the Eurozone (and the rest of the world for that matter) will be thrown into economic turmoil. The chances are that it would also be the death knell of the Euro as we now know it.
Desperate to keep the country from bankruptcy, the Greek government will be placing 30,000 of its civil servants aged over 60 on reduced pay in a ‘labour reserve’ from this December.
Evangelos Venizelos, the Greek finance minister, told a newspaper that this move "…creates the lowest possible social cost and places on a reserve those who in comparison can more likely cope with the difficulties of this new situation,"
Michael Fuchs, a deputy parliamentary floor leader for Chancellor Angela Merkel's Christian Democrats, has reportedly told the Rheinische Post newspaper that, even after all the bail-out money, Greece is broke. ‘Greece is bankrupt. Probably there is no other way for us other than to accept at least a 50pc forgiveness of its debts’. He said.
What is also causing concern are rumours that Slovakia will vote down the proposal for an extended European Financial Stability Facility.