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Should Greece stay or should it go? Analysts divided on whether Greece will exit euro

George Panagakis | Pacific Press | LightRocket | Getty Images

The future of Greece in the euro zone is once again in doubt as creditors and Athens cannot agree on debt relief for the troubled economy.

The outspoken German Finance Minister Wolfgang Schauble told the German broadcaster ARD that in order to cut its debt, Greece would have to leave the euro zone.

Similar calls were made across the largest euro economy, where elections will be held after the summer. The German pro-business party FDP (Free Democratic Party) also said Thursday that Greece should leave the euro zone and then receive debt relief.

The question of debt relief has been the biggest sticking point in the course of the third bailout program, totaling 86 billion euros ($92 billion). The International Monetary Fund has pressured European creditors from the start to make the Greek debt more sustainable. But European leaders are reluctant to offer Athens significant relief before the program comes to an end next year and not before they have overcome the heavy political calendar.

"Germany has been against giving something significant before the election and the end of (the Greek bailout) program," Athanasios Vamvakidis, global head of G10 forex strategy at Bank of America Merrill Lynch, told CNBC over the phone.

Greece has already received some short-term measures that alleviate its debt burden, but at the moment it is stuck in negotiations with creditors, who refuse to provide significant relief for the medium to long-term without Athens legislating measures that will ensure financial stability after the bailout program.

"The German pressure is part of these negotiations," Vamvakidis noted. "There will be more headlines, more risks (that Greece will leave the euro) until Greece runs out of money. This is when they will reach an agreement."

'Explosive' debt

This has been the scenario throughout Greece' bailout programs. In 2015 and 2016, headlines showed increasing tensions between both sides. Creditors asked Greece for more austerity and the latter refused without debt relief. Make-it-or-break-it moments ended with a last minute deal.

Greece has to repay 8 billion euros it owes government and private investors due next July. If it doesn't implement reforms that its creditors demand, including on pensions, it will not get new disbursements and therefore it could very easily default on its debt once again. It seems that another break-it-or-make-it-moment is on its way as we approach the deadlines for repayments.

The issue resurfaced this week after the IMF said that Greek debt would become "explosive" after 2030. The institution led by Christine Lagarde said that Greek public debt stood at 179.4 percent of GDP in 2015 and it is set to go up this year to 183.9 percent of GDP.

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"Europe has made clear commitments to support Greece with additional debt relief after the European Stability Mechanism program, under the condition that this is necessary and that Greece has implemented all the agreed program reforms," a spokesperson to the ESM, the euro zone's loan mechanism, told CNBC via email on Thursday.

"As a result, we see no reason for an alarmistic assessment of Greece's debt situation," the spokesperson added.

Bye to the euro

It's not a view shared by some who say the chances of Greece exiting the euro zone have increased.

"This time around both sides can contemplate Greece leaving the euro," Claus Vistesen, euro zone economist at Pantheon Macroeconomics, told CNBC on Thursday.

He added that the risk of Greece leaving the euro is higher now than it was two years ago, before Greece negotiated the third bailout program.

The difference now is that the Greeks are increasingly fed up with the system, though not necessarily with the euro. Since 2010, they have been under severe austerity measures.

Data released Thursday showed that the unemployment rate in Greece stood at 23 percent in November despite a general uptick in its economic prospects at the end of 2016.

However, Vamvakidis from Bank of America does not agree that the risk of a Grexit has increased. Opinion polls have continuously showed support for the euro zone among Greek voters and the most anti-euro ministers that once featured in the Greek government are no longer there.