Greece nears end of the road

In what has been a very contentious¬†five¬†months of negotiations since the election of Alexis Tsipras, “The Institutions” (a replacement platitude for the previously known Troika) have given the Greek government an ultimatum–agree to our terms as given, or get ready to get out of the European Union.

“The climate is that either by Saturday Greece accepts or on Saturday there will be a discussion about Plan B,” a euro zone official at the summit said, referring to measures that would be needed in the case of a default to prevent a Greek bank collapse and limit any market contagion to other euro area countries

Diplomats said the lenders’ tactics reflected exasperation at his refusal to accept reforms of pensions, labour markets, wages and taxation, which cross his Syriza party’s self-declared “red lines”.

The mood in Brussels has swung from hope to foreboding this week but seasoned diplomats cautioned that in EU negotiations the situation often looks bleakest before a last-gasp deal.

World markets have been on edge regarding the situation, but more so on the lookout for “contagion”–the spreading of the crisis to other Eurozone periphery nations or economic markets caught out by triggering of derivatives.

While there is time, including a Saturday summit meeting with the full EU, it is becoming harder and harder to expect Greece to back away from the abyss.

[Reuters][Photo: Kostas Tsironis/Bloomberg]