ATHENS- Greece is approaching political and economic turmoil as the country's creditors and the leftist government of Prime Minister Alexis Tsipras dispute over the mixture of the policy measures that will ensure the medium-term fiscal solvency of the country.
On Wednesday, euro zone lenders halted 45 billion euro ($47.7 billion) in short-term debt relief to help the indebted country, which is suffering from a deep recession and high unemployment. This came after the Greek government proposed to make a one-off payout to pensioners in December.
Freezing the flow of funds to Greece now threatens to trigger a renewed flare-up of the Greek debt crisis and would create a further test for the cohesion of the European Union. The debt relief was intended to help weak Greek banks shore up liquidity.
Just as concerning, it precludes Greece from participating in the EU's quantitative easing program.