As three years of financial crisis, Greece is close to abandoning the euro as it makes a third plea for financial assistance.
Europe is faced with the threat of Greece leaving the euro group if the ailing nationa can't get the aid it needs. Germany's minister of finance, Wolfgang Schäube, says that asking for time is the same as asking for money (to the tune of 20 billion euro) and that Greece already got a bailout six months ago. Schäube thinks that "it is too soon to say that the aid is insufficient." Underneath, confidence is a question mark, and what the euro group and Germany want to know is when it will be possible for them and investors to regain confidence in Greece.
This is the reason that the EU and Germany decided to wait until October to decide whether to give Greece the money it needs. In October the troika will publish its latest report on Greece's economic condition. Greece knows that the ball is in its court, but they need to create growth in order for the reforms to have any lasting postive effect.
In the macro context, with growth in China and the United States rallying and half of the EU submerged in a reccession that is starting to threaten Germany's economy, economists are sceptical that Greece can meet its objectives if they are given more time. The time they have been given so far has expired and the only decision left to make is whether Greece will stay on the euro -- or revert to the dracma. Either situation would be costly, but the consequences of the former would be incalculable.
