Greek leaders were fighting hard to find ways of further cutting €325 million as EU leaders, adopting an increasingly tough attitude, said they remained unconvinced that Greece had done enough to resolve its debt crisis, even cancelling a special Finance Ministers' meeting scheduled for Wednesday in Brussels.

Latest reports indicate that the EU is contemplating delaying the Greek bailout package until after the country's parliamentary elections, scheduled for April. Earlier, EU governments, spearheaded by the Germans, had pressed Greek political parties to give written commitments to the effect that they would respect the austerity measures adopted by the present Parliament, whatever the outcome of the elections. It is a measure of the EU's total lack of trust in Greece that even such written assurances are no longer considered acceptable or reliable. The Euro group's chairman, Jean-Claude Juncker, told journalists: “I have still not received the required political assurances from the leaders of the Greek coalition parties on the implementation of the austerity programme.”

The EU's mistrust has been further fuelled by the latest economic figures from Athens indicating that the Greek economy shrank by a full seven per cent in the last quarter of 2011. Meanwhile, the sand continues to flow out of the hourglass for Greece, which has to meet debt repayments of €14.5 billion by March 20.

Last Friday, desperate and angry demonstrators set fire to beautiful public buildings in central Athens causing damage likely to run into the millions of euros. The Greek population has been brought to its knees with unemployment now crossing the 20-per-cent mark.

“I am a lawyer. Yet, I have no job and I continue to live with my parents. The EU accuses us of tax dodging. But European nations continue to use Greek shipping companies that hide behind the flags of Panama or other such tax havens. Is the EU not being hypocritical? Are they not encouraging tax evasion in Greece and profiting from it? I think we should dump the euro and go back to the drachma and deal with our poverty ourselves,” said Ismini, a young law graduate from the Athens, echoing the views held by many of her compatriots.

But financial analyst Eric Le Pape said quitting the euro would spell catastrophe for Greece. “If they might be able to crawl back into shape in ten years time by staying with the euro, opting out will set them back thirty years. Tourism, Greece's main industry, will not be able to feed the nation. We are likely to see mass migration. In fact the scenario is too terrible to contemplate.”

First hints

The first hints that the EU is preparing to ease Greece out of the eurozone came from German Finance Minister Wolfgang Schauble, who said the eurozone was in a better state to “handle” a Greek departure than it had been two years ago.

Markets in Europe perked up on Wednesday following Chinese assurances that it would pick up some of Europe's debt. However, financial analysts were left guessing as to how much EU debt the Chinese currently hold and the extent of their possible future investments. Europe also finds itself in a bit of a bind. It has unilaterally decreed a carbon tax on all airlines flying to European airports. The Chinese have flatly ordered their airlines not pay the tax which has seen opposition from India, Brazil and other nations.

“This does not leave us in a happy situation. We cannot go cap in hand to the Chinese asking for bailouts through the IMF or the European Financial Stability Facility while slapping on taxes against their airlines. I think the EU Commission might just have to buckle down on this,” said Francois Langlet, who heads a major business television channel in France.

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