As the Greek government struggles to enforce austerity on its protesting citizens, Europe's bankers whisper about the possibilities of never getting their money back and its likely consequences.
As hard as the Greek government might try to push the costs of this crisis onto its citizens, the Greek working class are having none of it.
On top of EU discussion about whether the government will default on their debt or not, the Greek working class are continuing their protests against austerity.
In the early hours of April 14th, in the Athens suburb of Keratea, locals furious over the building of a new landfill site dug a two-meter deep ditch across the Lavriou Highway, leading to Keratea – permanently blocking traffic. Hours later, scuffles broke out with police who rushed to the spot. Athens' top police officer has also recently asked for his men to be removed from the area.
"There is clearly a breakdown of the rule of law, and without the rule of law there can be no economic development," said political analyst Takis Michas.
The refusal of austerity by Greek workers has seen thousands sign up to the "can't pay, won't pay" movement. In reaction to this, the government is announcing reductions of up to 50% in road toll fees. As the nation struggles to rein in a debt of €340bn, the logic of appeasing protesters – an estimated 8,000 Greeks a day were refusing to pay tolls – has outweighed antagonising them further. "Our hope is that this will calm things down," the deputy transport minister Spyros Vougias said.
Greece has also seen numerous strikes, occupations, demonstrations and riots, all of which are causing many to wonder if Greece is becoming ungovernable.
Haunted by a recession that has exceeded even the worst predictions of the EU and IMF almost a year after they moved to rescue the country with their bailout last May, austerity has hit Greece as never before. Last week it emerged that hospitals were facing severe shortages of beds and supplies while schools could no longer afford cleaners. Disposable incomes have dropped dramatically as wages and pensions have been slashed, taxes have been raised and unemployment has reached a record 15%.
Eighteen months after the economic crisis erupted, Papandreou said last week that more cuts were needed to meet deficit-cutting targets
Meanwhile, talks to negotiate Portugal's bailout are due to begin in Lisbon. Representatives of the European Commission, the European Central Bank and the International Monetary Fund are meeting Portuguese authorities on Monday to discuss what would be the eurozone's third bailout since the global economic crisis.
The negotiations, which are expected to last weeks, will set the terms for what is expected to be a $116bn deal.
Jose Manuel Barroso, head of the European Commission and a former Portuguese prime minister, has said it "will be a medium-term programme with strict conditions".
The aim is to come up with a radical economic reform plan, including privatisations, labour market reforms and steps to shore up fragile banks by mid-May, weeks before Portugal is due to hold a snap election.
Portugal itself has also seen an increasing wave of protests with strikes on the Lisbon subway in recent weeks as well as demonstrations across the country organised through the Facebook which attracted over half a million people.
The Portuguese government is now facing added pressure from Finland, where the anti-EU True Finns party, made big gains in an election on Sunday. Timo Soini, the party's leader, said that there would "have to be changes" to the bailout plan.
It may take weeks to know whether the party can back up that threat, but its success in the election potentially poses a huge risk to Lisbon, which has said that come June, it will run out of funds to keep the country running.
Any delay in approving the bailout deal beyond the mid-May target could leave European leaders scrambling to find other means of funding for Portugal.
The EU and the IMF have each warned that Lisbon will have to implement more public spending cuts, tax rises and far-reaching privatisation to secure its lifeline. The debt rescue is already highly controversial in Portugal, where unemployment has been increasing for almost a decade and education levels are below th eurozone average.
'Defaults' and their consequences
A default is when a country misses a repayment on its debts. This would probably lead to investors shunning a country's debt, making it hard for the government to borrow.
If Greece is unable to push the cost for their economic crisis onto the working class this could lead to them defaulting on their debt. What the EU's policymakers are scared of is that the German and French banks would declare massive losses. Also, Portugal (and possibly Ireland) might default on their debts.
The last major default on a national debt was Argentina in 2001 which resulted in massive protests across the country.