The government, seen here during its most recent meeting in Thessaloniki on Friday, may proceed to partial restructuring of its debt, although there are still some steps it could take to avoid such an eventuality.

The determination of the Greek government, the EU and the IMF to avoid the restructuring of the country’s public debt should not be doubted. This does not mean, however, they will be successful. Greece may proceed with a partial restructuring of its debt held by official lenders but this may not be the kind of credit event many market participants have in mind. However, it still has a chance to avoid even this by taking some other steps.

By all accounts, the Greek economy is heading deeper into the worst recession in the last few decades. The gross domestic product (GDP) fell 1.8 percent in the second quarter compared to the first, confirming widespread evidence from the business community that main sectors of the economy, such as construction, real estate, retail and wholesale commerce, are under severe strain. 

Source:http://www.ekathimerini.com/4dcgi/news/economy_1KathiLev&xml/&aspKath/economy.asp&fdate=13/09/2010