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Greece lurches closer to collapse

Greece could finally default in March when massive bond payments are due.

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Pedestrians pass a closed metro station during a 24-hour strike in Athens, Tuesday. International debt inspectors visit Athens to review the course of Greece's austerity reforms. Unions call for strikes and work stoppages in some sectors in the Greek capital.

Thanassis Stavrakis/AP

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Greece, where the eurozone debt crisis started in 2009, seems to be closer to financial collapse than ever. 

While Italy and Spain, both struggling with huge debts themselves, have been able to reassure most investors that they can weather the storm, it is looking more likely that Athens could finally default in March when massive bond payments are due. Some observers think Greece is already beyond redemption.

“In my opinion, Greece has already defaulted,” says Clemens Fuest, an economist at Oxford University and adviser to the German government. He and other economists argue that Greece is unlikely to be admitted back to the financial markets anytime soon and is being kept afloat by bailout money in order to avoid damage to the eurozone. 

His Greek colleague Nikos Vettas from the Athens University of Economics disagrees. “It is still possible to escape this vicious circle if we see decisive action within the next weeks and months,” he says. "Private creditors have to agree swiftly on the haircut procedures, the EU partners to deliver the support needed, the citizens to actively support a reform agenda and the politicians to reach the minimum consensus required for such reforms."

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