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The main questions that very few analysts dare to answer in this difficult situation for Greece and its economy are what exactly the situation is and what would happen if Alexis Tsipras gave way to pressure from the creditors and implemented the severe fiscal measures. What are the two main scenarios for Greece and what should the European Union do to stabilize Greece's teetering economy?

An analysis by Brookings Institution attempts to answer these questions, aiming to combine all the present and future data.

The nightmare is here

The situation is not the best for Greece: its gross domestic product is going to fall again after a 0.6% short growth in 2014 generated by tourism and a 1.6% increase of private consumption. Parallel to that, employment is falling again and the primary budget surplus has evaporated within three months. The analysis by Theodoros Pelagidis for Brookings Institution states, "There is no doubt that the political risk has killed the anaemic recovery. It has also destroyed the Troika programme. However, polls show that people seem to be relatively happy with a government that is said to play hard ball although the honeymoon of its ruling is close to being over. Furthermore, people are beginning to understand that the postponement of the drama (the reforms) will make the situation even more difficult. In the event of a Grexit, the poor will be the first who will pay a heavy price. In any case, sooner or later, the Greeks will have to face the reality and will have a more cool-headed view about the future of their country. In the meantime, the government is serving its debts by using cash from pension funds and public institutions, making a future possible default even more painful and disastrous. As time passes by, it becomes evident that behind the frozen smiles of the government members, the country is going nowhere. And the creditors have finally got it."

The two scenarios

According to the analysis of the Brookings Institution, two possible scenarios may take place in Greece in the coming weeks.

1st scenario: The deep dark before the dawn

This is the baseline scenario. The government is running out of money, being no longer able to pay both its loans to the International Monetary Fund, and salaries and pensions. In this case, Alexis Tsipras has to take a final decision and agree with the creditors. Then he has to explain to citizens the painful but indispensable agreement. The necessary reforms will have to be discussed and voted on in parliament, and then implemented to enable the creditors to give money to Greece. If the first does not happen, the latter will not happen either and the confidence of Greece’s creditors will be totally destroyed.

Neoliberal populism

What happens then? The agreement comes with a new European low interest loan. The new "national populist" government applies a "neoliberal populism", i.e. seemingly left/nationalist rhetoric, combined with a policy of market deregulation and a huge wave of privatizations. An important detail here is the following: the government is totally incapable of preparing anything because it is forced to beg for money.

The creditors in turn will have to present the new rules, prerequisites and technical details in time. According to Theodoros Pelagidis, the probability of this scenario occurring is 75 percent. But even in this case, it will be just one episode of the Greek drama, "Sooner or later the government will collapse - not because of the austerity but the incompetence, the inexperience and the lack of diligent, hard-working people (rather than media persons) and  because of this vacuum, the government cannot serve its clientele voter that is hungry for money, jobs and other privileges. By destroying the weak recovery the government has undermined its future."

2nd scenario: Domestic implosion

This is another term for Grexident. Due to its inaction and incompetence, the government finds itself entangled in a meaningless game in which it receives no money in the end and assumes full political responsibility for the collapse of the economy. The original idea of ​​SYRIZA based on Chavez, Maduro or Putin presupposes the existence of a powerful state and party mechanism, which is not the case in Greece.

In this scenario, a bankruptcy in the euro zone means that the government is in a hopeless situation and it can only surrender to the creditors or announce elections to be held in an atmosphere of panic and capital controls.

What the Europeans should do

Supporting the banking system and avoiding the mistakes made in recent years by feeding the clientelist state are measures in the right direction, but they are not sufficient. According to the analysis of Brookings, Europe should take further action to achieve a substantial agreement. It should talk directly with the pro-European Greek middle class to explain the essence of the reforms. At the same time, it should provide funds to deal with the consequences of the humanitarian crisis and to extend the deadline for the repayment of the loans from the European Financial Stability Facility by reducing interest rates. The European Stability Mechanism should grant a new loan with a lower interest rate, the European Investment Bank, funds for investment, and the European Structural Funds, programmes that provide for the granting of many billions of euro.