The Greek crisis is back, and this time it’s more serious than before

Amidst the hullabaloo of the general election campaign, one thing that has generally gone unnoticed in Britain’s political discourse is the worsening Greek situation. You now have European finance ministers openly talking about the possibility of a Greek default.

What has changed is that there is now no goodwill and very little trust between Greece and the rest of the Eurozone. The rest of the Eurozone think that the Greeks are obfuscating and not providing the details needed. While the Syriza-led Greek government feel that the rest of the Eurozone is not providing them with the political cover they need to make a deal. They feel that the Eurozone’s insistence that Athens runs a Budget surplus even before debt repayments have been taken into account is unreasonable.

This situation could come to the head very soon. On May 12^th, the Greeks need to pay $750 million to the IMF. It is not certain that they will be able to do that unless more bailout cash is released to them. Another issue is that the Greek banks need ECB support to keep going, if that is withdrawn then they would struggle.

The upshot of all this is that the Eurozone crisis could flare up again just as the next British government is being formed. This would add another element of uncertainty to the post-election negotiations.