The Greek tragedy is in a dramatic downward spiral but all hope is not lost. The curtain may not come down just yet as a possibility of a Eurozone bailout is still alive.
Greece was offered a last chance by the Eurozone leaders Monday for coming up with a new plan to pull itself out of its dire situation. But prospects seem slim that no matter what Athens proposes, the ECB will refuse to grant any more concessions and there seems to be no constructive way out of the current situation.
The ECB is the last stop on the road to Grexit and it just might have to put the pressure on Eurozone leaders to allow the Greek government debt to be used as collateral in order to retain at least the minimum amount of cash flow that would keep the country afloat.
According to German Chancellor Angela Merkel, the door is still opened for negotiations. But she pointed to the other members of the Eurozone to take responsibility for preventing what could turn out to be just the tip of the iceberg for the collapse of the single currency. Indeed, the question remains just how much more these countries can do to save a fellow member from financial demise without bringing the rest of them down at the same time.
Germany’s Hard Line
Merkel has signaled a hard line towards any further delay and expects Athens to roll out a new reform plan immediately or face a definite exit from the Eurozone block. Prime Minister Alexis Tsipras promised voters a reforms-for-cash deal with creditors within 48 hours of Sunday's referendum but it is now show time and there are few rabbits left to be pulled out of the hat.
Still, there are some optimists in the crowd who believe that a deal with the Eurozone leaders can be worked out, some sort of debt concession similar to the proposed arrangement offered before the decision was put in the hands of the Greek people. These analysts interpret the referendum results as an indication that the majority of the populace prefer to remain in the euro and Prime Minister Tsipris has made that quite clear.
No one wants to be blamed for the current situation--neither the political leaders nor the central banks-- and everyone is scrambling for a way to prevent the worst case scenario. The Eurozone leaders have come up with nothing new and the ECB is now putting more pressure on Eurozone leaders to guarantee the collateral Greek lenders were using in order to qualify for its past IMF loans.
Tsipras hints that he has worked out a new debt deal which he hopes will satisfy the ECB, but has not revealed any details. Skepticism exists as to what he can put on the table that has not been proposed—and rejected—previously. Eurozone leaders have made it clear they will not tolerate any more concessions and EU lawyers are exploring ways to allow the Greek exit—should it come down to that—to be legal even if it means only a temporary "suspension" from the shared currency.
It remains to be seen what will happen next.