The economist Wolfgang Munchau has written a series of articles in the big-business paper the Financial Times over the last month arguing that Greece is now bound to default [i.e. fail to pay its international debts] sooner or later.
His argument runs as follows. In the run-up to the global financial crisis, and even in the early phases of it, the eurozone ran with a big trade surplus for Germany matched by a big flow of loans from German and other richer-country banks to the poorer eurozone countries, like Greece, which were running trade deficits.
Now the flow of new credit is drying up. Greece has to pay its debts. But drastic cuts will depress its economy and leave it with less output to pay its debts from.
Other countries which have scraped through similar debt crises have done it by devaluing their currencies, thus expanding their exports and getting more income to pay the debts with.
Because Greece is in the eurozone, the Greek government cannot do that. It has no control over its exchange rates.
By 25 April, Munchau's predictions were becoming more, not less, alarmed. "Unless we hear some implausibly good news from Athens by Friday, [the crisis] will soon blow up". And "the crisis will spread to Portugal and beyond". It will then be a huge crisis for the whole eurozone, not just Greece.
Thus it looks as if the huge cuts planned by Greece's Pasok (social-democratic) government may not even allow the government to go on paying its international bills.
Greek unions have organised renewed strikes against the cuts, and plan a further general strike on 5 May.
The European Union and the IMF have agreed in principle on IMF loans to Greece, and the first loan money is due to be delivered by 19 May. But meanwhile:
"The interest rate that Greece would have to pay to borrow new funds soared to 11.142 percent from 9.73 percent late on Tuesday [27 April].
"Greek 10-year bonds have now lost 30 percent of their value since mid-March as the... government in Athens struggles to contain its debt and public deficit to ward off default.
"The latest surge in yields followed a move Tuesday [27th] by ratings agency Standard & Poor's to slash the country's credit status to junk levels, meaning that big investors such as pension funds will no longer be allowed to buy Greek debt" (AFP).
A little-discussed factor in the crisis is Greece's high military expenditure. It spends much more, in proportion to national income, than any other European country, about two-thirds more, proportionately, than the UK and France, and consequently has spent a lot on military imports (http://bit.ly/1aqSiL).