Greek political parties on Monday failed to agree on terms for a new bailout package, sending stocks across Europe lower.
The debt-ridden eurozone nation's leaders yesterday failed to adhere to Monday's timeline for accepting the terms set by international lenders for obtaining a second bailout package.
Markets are divided over whether the wrangling over Greece's debt restructuring talks would eventually be resolved or trigger contagion across other vulnerable eurozone countries.
Talks between Greece and various other stakeholders over how best to avoid a default have dragged on for quite a while now. Willy-nilly, Greece has become a test case for the eurozone as it struggles to rein in a long-running debt crisis.
The eurozone financial system is not yet seen to be in a position to deal with a disruptive Greek default and a possible European Monetary Union or European Union exit.
European leaders stepped up pressure on Greek politicians to meet the conditions of a €130bn (US$171bn) bailout, saying that time was running out.
French President Nicolas Sarkozy met German Chancellor Angela Merkel in Paris even as Greece’s interim prime minister, Lucas Papademos, prepared to negotiate with the so-called troika of international lenders in Athens for a second day.
A gathering of Greek political leaders was delayed until Tuesday as they struggled for a unanimous response.
Greece is set to pay a €14.5bn ($19bn) bond due on March 20.