EU Finance Ministers Meeting on Greece Bailout

The Parthenon in Greece
Scott E. Barbour | Getty Images
The Parthenon in Greece

Der Spiegel magazine's report that Greece is threatening to leave the euro zone is triggering a flurry of journalistic activity.

The Greeks vehemently deny it's true.

Since they have no access to financial markets — their government survives on bailout loans from the European Union and the International Monetary Fund — and their commercial banks are kept afloat by cash from the European Central Bank, it would be illogical for Athens to bite the only hand that feeds it.

But numerous sources now confirm something that we didn't know; that a small group of major euro zone finance ministers — including France and Germany — are meeting tonight in Luxembourg.

Since their own commercial banks are so exposed to Greek debt, they have to keep tap dancing to prevent a Greek default.

But even after the Greek government's cut this hard — 8% of GDP — it's still drowning in debt.

On Sunday night, senior members of the EU/IMF arrive in Greece to start a week-long analysis of whether the Greeks have done enough to get the next slice of their $160 billion bailout.

More importantly, tonight's finance ministers meeting might lay the groundwork for "extending the maturities" on those loans — giving Athens a little more oxygen until it probably ends up restructuring its $470 billion existing debt by either extending maturities or exchanging Greek bonds, at a discount, for EU-guaranteed bonds, Brady Bond-style from the 1980s.

Now if the Greeks encountered resistance to something they needed, of course, they might threaten to leave the euro zone, albeit with a very big smile.