EU Prepares for Worst Case Scenario in Greece – German Newspaper

During today’s Eurogroup meeting, Greece is expected to present its comprehensive reform program, followed by repayment of its 750 million debt on Tuesday. However, expectations from European countries are far from positive, with many of them preparing for possible worst case scenario, the newspaper reported.

According to Die Welt, there are three possible scenarios for the outcome of today’s meeting:

Scenario 1. Greeks overestimate their financial reserves.

According to this scenario, the Greek government would present substantial reform proposals, but overestimate its financial reserves.

In this case, Greece would need money to bridge the financial gap and the European Central Bank would be ready to provide necessary financial support.  The most important requirement is, however, that "Greeks really show commitment at the negotiating table," Brussels official said.

Scenario 2. Greece makes half-hearted reform proposals, is not able to repay its debts.

This scenario assumes that the Greeks would come up with half-hearted reform proposals and hope that other countries give in (which they don’t). In the next few weeks, the country will no longer been able to pay off its debts to the IMF and the ECB.

A further development of the situation will depend on the behavior of the Greek government. If it shows a willingness to reach an agreement with the Europeans and carry out necessary reforms, the whole situation may improve. In this case, Greeks would have to introduce temporary capital controls to prevent the “financial bleeding” of the country, as it was in the case of Cyprus.

Scenario 3. Greeks shows no willingness for cooperation and debts’ repayment

In this case, Greeks show no intention to carry out necessary reforms and prove unable to repay their debts. They also do not return to the negotiating table anymore and start introduction of a parallel currency, which would mean the beginning of Greece’s withdrawal from the monetary union.