It looks increasingly likely that the so-called comprehensive solution to the eurozone?s sovereign crisis may not be what Greece has hoped for, which, coupled with a steady deterioration in the real economy and the obvious divisions in the government?s ranks, may bring forward the restructuring of public debt.
It is clear though, that Greece cannot proceed unilaterally to any such decision without first getting the green light from the International Monetary Fund, the European Union and the European Central Bank.
Theoretically speaking, a heavily indebted country such as Greece is in a better position to negotiate a deal with its creditors to reduce its debt burden when it runs a primary budget surplus, that is, when its revenues exceed expenditures without including interest payments on its debt.
According to the economic program approved by the EU and the IMF, the country will be in a position to do so in 2012 and therefore this is the best time to ask its creditors to make some concessions. However, we all ignore sometimes that Greece still gets a lot of money from the EU in the form of social and structural funds.
It is estimated the country received more than 2.7 billion euro from the European Social Fund and the European Regional Development and Cohesion funds in 2010, and is projected to receive some 3.35 billion euro this year, 3.73 billion in 2012 and 3.89 billion in 2013.
This is a lot of money at a time when external support to the economy is of utmost importance and may be endangered if Greece decides to act unilaterally without first consulting with the IMF and the EU.
It is, therefore, safe to say that even if the country wanted to default it would not be possible without obtaining the prior consent of its official creditors.
Of course, one may argue that the leaders of the main political parties in the country entertain the idea of going back to the drachma. Even this is not easy as some think according to a conference held in Rome in early February.
The conference, which was attended by well-known economists, academics, lawyers and bankers in Rome, and titled ?The Eurozone Financial Crisis: What?s Ahead?? arranged by law firm Cleary Gottlieb Steen