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Greece  petitioned Eurozone nations and the IMF for the funds necessary to keep it  solvent, according to several media sources. The Eurozone countries have made a “promise” to join the International Monetary fund to provide as much as $40 billion. It is not clear how much time that will buy for the southern European nation which has total sovereign debt of more than $400 billion of which over $50 billion is due this year.

Part of the reason Greece must ask for the money is that Eurostat, which tracks budgets of countries within the Eurozone, found that Greece had missed it 2009 budget. That revelation caused the prices of Greek bonds to plunge leaving the interest the country would have to pay on new issues at astronomical levels

The fixed income and debt insurance markets are still betting that Greece will default with the cost of insuring Greek debt rising to record levels along with yields on the nation’s sovereign paper.

There is still some question about whether Greece will get the financial support it needs  Polls in Germany show that two-thirds of the people there do not favor the bailout. This puts pressure on the ruling party. A bailout cuts into Germany’s sovereign capital,  making it more difficult for the country to raise money in the markets

Greece may eventually reject any aid. The IMF may ask for stringent rules over how much the Greek government can spend to run the nation and offer social services. Greece’s alternative to taking capital would be to exit the Eurozone and devalue its currency to improve its cost of operating without aid beyond what debt it could sell to the global capital markets. But, the amount of Greek debt is so high and so much is due in the next quarter that the country may find that default is its only option.

A default would have a number of bad results, the first of which would be to damage the balance sheets of a number of large European banks which own Greek debt. That might, in turn, cause the nations where those banks are based to have to provide bailout money to the financial firms.

It is late in the game for the Greek debt problem to be settled. Loan guarantees or capital, even in the amount for $40 billion, will only buy Greece time, and not much of it.

Douglas A  McIntyre