Greece wants a break from the terms of its eurozone bailout loans, saying they’re suffocating its economy.
Germany, the biggest backer of two bailouts worth 240 billion euros (currently $271 billion), says Athens must pay what it owes.
The two sides, debtor and creditor, are dug in and posturing.
Yet analysts think a negotiated compromise over the coming weeks is possible — though far from certain. Greece could yet run out of money and leave the euro.
A Greek exit from the euro — or “Grexit” — would unleash more turmoil in Greece. Its effects on the eurozone and global economies are less clear. The eurozone has new safeguards to stabilize markets, but some experts think “Grexit” would disrupt Europe’s fragile economy and permanently undermine confidence in the 19-country currency union.
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While it has made progress slashing its budget, Greece has made slower progress in making its country a better place to do business.
So-called structural reforms include reducing unnecessary paperwork and red tape, removing protections for individual professions, improving notoriously slipshod tax collection and fighting corruption.
Syriza has proposed rolling back some pro-business reforms. They want to restore cuts in the minimum wage, bring back a 13th month of pension payments, reinstate employee protections and lift restrictions on collective bargaining agreements.
POSSIBLE COMPROMISE:
Creditors may not give much ground here. Some structural reforms can slow the economy temporarily but should pay off in the long turn. Syriza has talked about making the rich pay more in taxes and tightening collection; that could be common ground with creditors.
