Frantic negotiations are underway between Greece and its lenders after Greek prime minister Alexis Tsipras made a last-ditch request for aid on Wednesday.
There are also increasing signs that Tsipras could cancel the proposed referendum scheduled for Sunday, following hints from finance minister Yanis Varoufakis and Greece's deputy prime minister overnight that the government may not proceed with a vote on the terms of the country's EU-IMF programme.
In a letter sent to Brussels late on Tuesday - an update to the official request for a third bailout earlier in the day - Mr Tsipras appears to have made a last-minute attempt to unlock desperately-needed bailout funds for his country.
Significantly, the Greek leader seems to have acceded to most of the austerity demands set out in the latest bailout proposal published on Sunday. Apart from a request for Greek islands to remain outside the highest rate of tax, a longer implementation period for defence spending cuts and a delayed phasing-out of the top-up payment for poorer pensions, the Greek government looks set to sign up to most of the fiscal adjustments now sought by the lenders.
Serious questions
Undoubtedly the latest bailout proposal from Greece opens up serious questions for Tsipras. That the prime minister who was explicitly elected on an anti-austerity pledge may now agree to another bailout proposal with significant conditionality puts question-marks over his leadership and strategy.
Further, it remains likely that the Greek negotiating hand is much weaker now than it was on Friday when its officials broke off talks with creditors in Brussels. Rather than securing a better deal for Greek people, it now appears that he may get a less favourable deal than was on offer during the negotiations.
Tsipras’ political position appears highly untenable, with many suggesting that he in fact does not want to continue to govern, given that a commitment to a third bailout package would be anathema to his political ideology. If he did choose to resign, he could argue that he made requests to the EU-side until the very last second. He would also likely be boosted by reports and rumours that a number of senior EU figures are effectively demanding the removal of Syriza as a condition for a further bailout package.
Many ironies
Underpinning all this is the paradox of the Greek prime minister asking for a deal which he will then ask voters to reject in the planned referendum - one of the many ironies of the chaotic situation.
The fact Wednesday's scheduled eurogroup conference call between finance ministers has already been delayed by six hours may suggest that a deal could be struck, though remarks from German finance minister Wolfgang Schauble at lunchtime suggest that euro zone member states may still oppose a deal for Greece, despite the new concessions from Athens.
With Tsipras expected to address the Greek public in the coming hours, events could change rapidly before this evening’s eurogroup meeting.
The European Central Bank’s meeting later could also increase pressure on the Greek banking system.
Whatever the outcome, this increasingly acrimonious drama reflects as badly on the European Union and IMF as on the Greek negotiators. The wounds of the last few months will take a long time to heal.