'Crunch time' for Greece in risky game of economic brinksmanship

Events in Europe continue to unfold as high drama - and not one that the rest of the world can afford to ignore. If Greece and its recently democratically-elected anti-austerity party insists on changing the terms of its already-accepted bailout by the EU, what happens next is unknown.

Neither path for Greece is easy or straight...but what does seem certain is that as hard as life has been for the Greek people in the past few years, it could be about to get a lot harder.

Amanda Lang

Deadlock. Impasse. Showdown. Those words are being used to describe the Greece bailout talks, which fell apart after Athens rejected the latest Eurozone proposal.

The new Greek government won last month's election on an anti-austerity platform.So it wants to scrap the current 240 billion euro bailout deal and do away with the spending cuts that came with it.

• EU presses Greece to reach debt deal as deadline looms
• Greece rejects bailout extension proposal, ending eurozone talks

Greece wants a bridge loan to help meet its short-term needs, while a new bailout is negotiated.The rest of the Eurozone is pressuring Greece to extend its current bailout program, amid worries that giving Greece what it wants will encourage anti-austerity movements in Spain, Portugal or Cyprus.

So the clock is ticking.Greece's current bailout expires on Feb.28.

Without a deal, the country will run out of money.Already, billions of euros in deposits are flowing out of Greek banks.And many Greeks are holding off paying taxes.

Now analysts at Commerzbank say the chance of Greece leaving the eurozone is as high as 50 per cent.And as Britain's Finance Minister suggested, calling it "crunch time" for Athens, that would be a serious development.

"Well we are reaching crunch time for Greece and the euro zone and I am here to urge all sides to reach an agreement, because the consequence of not having an agreement would be very severe for economic and financial stability. Now, we have a long-term economic plan in Britain and we can better protect ourselves against those consequences, but what Britain really needs to see is competence, not chaos," George Osborne said.