Concern is now growing that the original package agreed for the bail-out of Greece may not in actual fact be large enough. With Germany already being asked to stump up some €8.4 billion and France about €6.3 billion the cracks in the Eurozone are really beginning to show.

It is thought that the agreed €45 billion (£39 billion) package may only be the start of the process, with final figures well in excess of double this amount being bandied about.

Greece is under intense pressure to drastically restructure its public finances before final authority is given to approve the aid. This will hit every Greek household very hard and some doubt that the government under George Papandreau could survive it.

The German Finance Minister, Wolfgang Schauble, has made it clear that Berlin will not transfer any funds until Greece has agreed to extremely harsh austerity terms.

The Greek Finance Minister, George Papaconstantinou, tried to widen the perceived threat “What we are talking about is not merely a Greek problem. There are broader issues around the eurozone” he said. Presumably the thought process being prop up Greece at all costs to ensure this contagion does not spread to the other Eurozone countries with large debt.


There are also concerns further down the road. Is this a one off event, or is it an open ended commitment with any country that gets into difficulty in the future getting a bail out? Many within the German political system are very concerned that it may become the latter.

Whatever the future, Greece is in for a very, very tough ride. The question is how badly will it affect the other members and the survival of the Euro. If Greece is forced to leave the Euro then the Eurozone has failed in a way anyway.

If the IMF step in then, as a net IMF contributor the UK would actually also be adding to any aid they may get.

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