BUSINESS

22 September 2011 Last updated at 20:54 ET

Greece's debt crisis odyssey

Greece and its lenders are locked in discussion. The "Troika" of lenders - the European Union, International Monetary Fund and Euro Greece must take more painful steps to cut its borrowing. But Greece faces riots and mass protests on the streets of Athens. The govern parliament - only 155 of 300 MPs backed the last round of austerity in June. At stake is the next 8bn euro tranche of bailout money, whic needs to avoid total crisis. Starting from the top, follow the decision tree to decide what happens next.

Does Greece meet the Troika's austerity demands? YES or NO

Recession deepens: Greece has to cut its borrowing to a target set by the Troika. But austerity deepens Greece's recession. Along with mass tax evasion and strikes by tax collectors, this has already made Greece overshoot its target twice.

Impasse: Greece has failed to deliver promised Troika has threatened to stop releasing bailout lo cash, Greece faces a crisis.

Does Greece miss its borrowing target again? NO YES

Greece has a funding shortfall: Despite the austerity, Greece still needs more cash. The Troika can lend it, or else Greece has to make more cuts.

Does the Troika release the bailout mon YES NO

Greece has a cash crisis: have enough money to pay for p must choose which payments to

Should the Troika...

demand more austerity? or give another bailout?

Does Greece stop repaying YES

Banking crisis: Default leaves Greek banks bust and risks a Europe-wide banking crisis.

Austerity succeeds: After years of painful cuts Greece does not need to borrow any more to fund government spending. But Greece still has huge debts to repay.

The Troika blinked: Greece has won the stand-off. The Troika is evidently too afraid of the consequences to let Greece go bust.

Does Greece renegotiate its debts? YES NO

Does Greece continue with austerity? YES or NO

Does the Troika bail Greece out? YES or NO

Greek banks

Greek banks collapse. Even after halting debt repayments, the government still can not pay all its bills.

NO PYRRHIC VICTORY
Greece forces its lenders to write off most of its debts, which probably bankrupts the Greek banks (its biggest lenders), meaning they must be nationalised. Greece still may face years of low growth as its economy is uncompetitive inside the euro.

DEPRESSION
Greece may face years of grindingly low growth as its economy is uncompetitive inside the euro. In addition, the government probably has to pass even more growthsapping austerity to cover the cost of its debt repayments.

MORAL HAZARD
Greece has its lenders over a barrel, earning kudos with the Greek public, and allowing it to slow down painful austerity. But Italy and other high-debt countries may copy Greek tactics. Germany - which is now seen as on the hook for bailing out the entire eurozone - may find it much more expensive to borrow, and may consider leaving the euro.

POLITICAL TURMOIL
The Greek economy may face total collapse, with banks closed and the government unable to pay for basic public services. This is likely to cause massive civil unrest and a collapse of the government. Greece has already seen rioting and the takeover of government offices. The CIA has warned of a possible military coup.

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