Greece repaid one of its key loans on Thursday, but with the country's coffers still close to empty, the government may merely have earned short-term respite.
As the holiday of the Orthodox Easter Weekend approaches, newly minted Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are unlikely to be unwinding for the long weekend. Greece has been given six working days by the euro zone technical staff of the Euro Working Group to come up with proposals for a reform agenda—on which further financial aid is conditional—ahead of a key meeting of euro zone finance ministers on April 24 in Riga, Latvia.
The struggling Greek economy still needs financial support. It faces two redemptions of bills for a total of 2.4 billion euros as soon as April 14 and 17.
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"Euro area finance ministers are probably at the end of their tether, after ten weeks of the new government's foot-dragging and game-playing, and any sympathy for the Greek position has long disappeared," the economic research team at Daiwa wrote in a research note.
Tsipras is barely off the plane from a trip to Russia, which seemed on the surface to have achieved little in terms of concrete promises from Russia to assist Greece in the event of it defaulting on its debt repayments, leaving the euro or losing financial support from its creditors.
Economists are now increasingly taking the possibility of a "Grexit", deemed incredibly unlikely by many just a couple of years ago. The risk of Greece defaulting on its debt repayments is now 50-50 percent, according to UBS, although its analysts argue that default does not necessarily mean euro zone exit.
The prospect of a negotiated exit within a month is now close to 40 percent, according to Gabriel Sterne, head of global macro research at Oxford Economics. And capital controls – limits on the amount of money that can be taken out of the country—usually a sign of severe economic distress—are just "one more turn of the financial screw away" he added.
Christine Lagarde, head of the International Monetary Fund, which together with the European Union is one of Greece's biggest creditors following a series of bailouts, told CNBC Thursday that a Greek exit from the euro zone would create a "terrible situation" for its citizens.
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