Many feel that Greece’s fate, including its continued membership of the eurozone, rests in the hands of the Troika – officials from the European Commission, European Central Bank and the International Monetary Fund charged with evaluating Greek’s reform efforts, its financing needs and how they should be met. But this is not the entire story by any means.
The country’s fate is also closely linked to what happens in Italy and Spain, and in a manner that is yet to be sufficiently understood by many. (Read More: Can Spain Avoid Greece’s Vicious Circle?)
Domestic political stability and economic reforms are clearly critical for Greece’s continued membership of the eurozone. Many are thus interested in how the Troika, acting on behalf of official creditors, will react to the government’s request to stretch out the budgetary adjustment over an extra couple of years.
Will they agree? If they do, how will the accompanied structural reforms be tweaked? And who will pony up the additional financing, either explicitly or through indirect methods (such as the refinancing undertaken recently by the ECB (Learn more)?