Greece wants nothing more than to avoid another bailout — which means it needs debt relief. And so far, that's the sticking point.
"There is now light at the end of the tunnel," Greek Finance Minister Euclid Tsakalotos said hopefully in June. After months of wrangling, the European Union and International Monetary Fund had just agreed to release more rescue funds to the perennially troubled nation, bringing the total from its third bailout alone to 40.2 billion euros ($47.75 billion).
Euro zone finance ministers took very light steps toward debt relief at that time — they said they were willing to keep deferring interest on financial assistance Greece had already received — but those measures fell short of the relief Greek Prime Minister Alexis Tsipras was pressing for.
The current bailout program is set to end in September of next year. Greece has been wracked by perennial financial crises since 2010, and it even appeared at risk of leaving the euro zone altogether in 2015.
Tsipras's objective is to re-gain full market access to international bond markets and to leave institutional help behind, so the subject of long-term debt is one that will continue to dominate discussions as it draws closer to September 2018. In July, Greece dipped into bond markets after a 3-year hiatus, issuing 5-year debt at an average yield of 4.66 percent. Greece is expected to return to the market again in the next 12 months.
IMF says changes to debt have to happen
But Greece's debt isn't manageable in the long-run without being either extended or forgiven, according to the IMF, which is pressing for easier budgetary targets for Greece while simultaneously undertaking reforms.
Its European creditors currently require it to achieve a primary surplus before debt service of 3.5 percent of gross domestic product.
The European Central Bank has also been emphatic that it will not include Greek government bonds in its own debt-buying mechanism, the Public Sector Purchase Program.
In a June letter, ECB President Mario Draghi ruled out that possibility, saying the central bank's staff wasn't in a position to fully analyze Greece's public debt.
Analysts at Barclays have estimated that the inclusion of Greek debt into ECB's bond-buying program would entail monthly purchases of around 115 million euros ($136.5 million).
Earlier this week, German Finance Minister Wolfgang Schauble said that the subject of debt relief was "not on the agenda at all." But a source close to the situation told CNBC that talks on medium-term debt could possibly begin in November or December, after Germany's September elections are over.