The Greek government is unsurprisingly unable to find consensus on new, even stronger austerity measures aimed meeting the terms of its bailout by the European Union and the International Monetary Fund.
Anger is growing in Athens as the economic situation worsens and the government is pushed into privatizing state-owned assets if it wants to get access to its next tranche of aid.
Divisions among policy makers in Europe over what to do next indicate inertia can be expected until the market forces the next leg of the crisis but some analysts say the Greek people are beginning to question the direction of policy.
“The rescue package has never been right in the first place,” said Karsten Schroeder, the CEO of Amplitude Capital told CNBC.
“In all honesty, the EU-IMF package was a rescue package for banks exposed to their debt and not Greece itself. It was wrong in the first place,” Schroeder added.
Others believe the new measures being forced onto Greece in order to free up money to see it through 2012 will do little to address the underlying problem.
“The privatization program, even if it arrives on time, will not be sufficient to cover Greece’s capital requirements,” said Jan Amrit Poser, the chief economist at Sarasin in a research note.
IMF Power Ebbing
With Greek officials aware of this, Poser believes the EU and IMF’s power to force new measures on Athens is ebbing away.
“The Eurogroup is caught on the horns of a dilemma. It has no power to threaten Greece because not paying the financial aid would have unforeseeable consequences for all the parties concerned.
The babble of phrases used to describe the steps that might be taken and the presumed consequences is increasing,” Poser wrote.
If you owe the bank 100 euros it is your problem, if you owe it a million it is the bank's problem.
At some point this is going to dawn on the Greek people and the politicians will follow, analysts said.
“Greece and other Southern European states (at least Portugal) should opt for the default option,” Schroeder told CNBC.
“The austerity measures combined with the debt levels are not manageable. They would never recover otherwise,” he added.
Education and investing in growth are Schroeder’s answer to the crisis facing Greece but he said Athens should also be considering leaving the euro all together.
"As a last resort, going out of the euro zone should be considered as an option,” he said.
This is not an option according to Poser who believes debt reprofiling is the answer.
“The legal prerequisites for this do not exist, nor would it be technically feasible to implement an exit within a reasonable timeframe. We think a euro exit can be ruled out entirely for economic as well as political reasons,” he said.
“A reprofiling does not reduce the face value of the bond, but instead the coupon and/or principal payments are delayed.”
“As a consequence, private creditors would maintain their exposure to Greece and stay on board. Second, it would reduce the strain on the protective umbrella in the short term. Third, Greece would have more time to repay its debts,” said Poser.
Euro zone politicians and policy makers will be hoping this option can ease the crisis.
For the Greek people paying the price of austerity it might not sound like such a good idea if growth remains so weak and the cost of meetings its debt repayments so high.
“Some suggest that defaults could create instability in the financial system: how do we know that the perspective isn’t spun by institutions with vested interests?” Schroeder questioned.
It might not be that long before Greece begins to ask itself the same question, some analysts said