As Americans were blithely celebrating President's Day, members of the Eurogroup were meeting in Brussels as part of a last-ditch attempt to keep Greece's economy from collapsing.
Reports The Wall Street Journal:
Negotiations over how to keep Greece afloat broke down abruptly Monday, demonstrating a wide gulf between Athens and its European creditors and triggering a new, heightened state of uncertainty about the country's future inside the currency bloc.
This week has long been circled on the calendar as the deadline by which Greek representatives need to agree to abide by the conditions of the Eurozone's previous bailout packages, or else lose the financing on which the country's banks have come to rely. No agreement will likely mean a sovereign default by Greece. If the country can't pay its debts, it will be forced to "Grexit," or leave the Euro and revert to a currency of its own.
You might be wondering: Why, if the Greeks need financing from European creditors, did the talks fall apart? Greece's newly elected Prime Minister, Alexis Tsipras, and his far-left Syriza Party just came to power in January. They say that the "strict austerity" the bailouts imposed has driven the Mediterranean nation into a recession–turned–humanitarian crisis and are doggedly refusing to implement them going forward.
Per a recap from India's NDTV.com:
The EU and the International Monetary Fund bailed Greece out in 2010, and then again in 2012 to the tune of some 240 billion euros, plus a debt write-down worth more than 100 billion euros ($113 billion).
In return for the bailouts, the then centre-right Greek government agreed to a series of stinging austerity measures, and the much-resented oversight by the EU, IMF and European Central Bank 'troika'.
Tsipras won elections last month on promises to ditch the programme, which he said had wrecked the economy and sent the jobless rate soaring.
European leaders, led by German Chancellor Angela Merkel, are insisting that Greece implement the austerity measures (laying off a large number of public sector employees and dramatically reducing government spending, for example) as promised. But Tsipras is claiming he has an electoral mandate to re-negotiate those conditions. He campaigned (and won handily) on promises to roll back his predecessors' policy pledges, which are wildly unpopular among the Greek people.
Tsipras seems to be betting that Germany and the others will capitulate out of fear of the damage a Greek exit would probably cause to the Euro—a sort of international Too Big to Fail situation threatening to plunge the global economy back into crisis.
Eurozone leaders insist a deal needs to be reached this week to avert disaster. At this point, it's anyone's guess whether that will happen, and if so, which side is more likely to give in.