ANALYSIS:The unsustainability of Greece's economic position is becoming more stark by the week

PRESSURE IS building as the euro zone’s tectonic plates push together ever more precariously. The northward-drifting Mediterranean plate has not been halted.

The unsustainability of Greece’s budgetary and economic position is becoming more stark with each passing week.

The southward-moving north European plate continues to jerk. The pressure of popular and political unwillingness to give an even bigger bailout package to Greece is building.

Is something big about to happen?

Over the next five weeks, a decision will have to be taken on Greece. If it doesn’t get more money by mid-July, it will not be able to repay maturing bonds. That would lead to outright default.

Few believe that the first sovereign default by a developed country since the middle of the 20th century would be orderly if it happened in that way.

But northern Europe’s leaders have not been successful in winning over their electorates to the wisdom of the current strategy, which is failing, as Greece’s need for additional resources attests.

In order to square the circle – avoiding the potential Richter scale-10 earthquake that a straight sovereign default could unleash while lessening the burden on northern European taxpayers – new halfway-house solutions are being floated with increasing frequency.

The latest was revealed yesterday. The German finance minister, Wolfgang Schäuble, writing on Tuesday to all the main national and institutional actors in the crisis, advocated having private bondholders of Greek sovereign debt accept new bonds when the ones they currently hold mature.

This is, in essence, a rehash of the proposal a few weeks ago to “reprofile” bonds, but the central question is whether this would happen on a voluntary basis. Any compulsion would amount to a default, potentially triggering the chain of events that Europeans have been desperately attempting to avoid for so long.

Tuesday’s proposal introduced some ambiguity. Schäuble wrote that his proposal would have to go “beyond a pure Vienna initiative approach”.

This is a reference to the successful co-ordinating role the Austrian authorities played in 2009, which kept financial institutions engaged in crisis-wracked former communist countries. But the Vienna initiative was non-compulsory.

The hint of possible compulsion had a predictable effect on Greek government debt yesterday. Its two-year bonds yields jumped, having drifted down from astonishing peaks of 27 per cent two weeks ago.

Having started the day at 22.6 per cent, yields on the Greek two-year bonds ended it at 23.9 per cent, having surpassed the 24 per cent threshold briefly in late afternoon.

Today’s European Central Bank press conference should be livelier than usual.

Outgoing boss Jean Claude Trichet has been the most ardent opponent of taking any risks on debt restructuring.

In recent weeks he has walked out of a meeting with euro area ministers. Later he threatened to end emergency lending to Greece’s teetering banks if finance ministers restructured that country’s sovereign debt. By so doing, he was in effect threatening the nuclear option. This is Frankfurt’s way now.

(It would be interesting to know if he ever used a similar threat when Eamon Gilmore and the rest of the Cabinet pushed the idea of restructuring senior bank bonds after taking office.)

The financial crisis started in the summer of 2007. It began to be critical the following summer. Ireland’s endgame was entered into last summer. The odds on another summer with the wrong kind of heat are high.