Greece has been hit by a crisis that threatens the stability of the single currency zone.
But it has been given a green light to leave.
In a sign of the mounting tension between Athens and its creditors, European Union officials have said they would consider allowing Greece to exit the eurozone if it agrees to cut its public debt to the bloc’s limit.
If Greece refuses to do so, they would have to take further measures to ensure its financial position remains sustainable, a senior EU official told Reuters.
But the EU is not giving Greece a free pass.
It is clear from the language used by the Greek government, that it has no intention of agreeing to a free ride, European Commission President Jose Manuel Barroso said.
The commission has already warned Greece that if it does not comply with its terms, the bloc would impose further sanctions.
The euro zone has been gripped by crisis since early 2015, when the Greek banking system collapsed and millions of people lost their savings.
In early 2017, Athens defaulted on more than $400 billion of debt and began to run out of money to pay creditors, including the International Monetary Fund, the European Central Bank and the European Union.
But Greece has kept the country afloat by borrowing from the European Financial Stability Facility (EFSF), which is run by the European Stability Mechanism, a bailout fund run by Germany.
The EFSF is a bailout for countries which have defaulted.
Greece has not been part of it.
In return for funding, the Greek economy has been steadily shrinking since the crisis began.
Its GDP has shrunk by 4.4 percent since the start of the year, while the unemployment rate has risen to nearly 30 percent.
The country’s budget deficit has jumped from 2.7 percent in 2015 to 9.7 billion euros ($11 billion) in 2016, a figure that is expected to climb further.
The crisis has caused widespread social and economic turmoil, with thousands of people homeless and thousands more forced to leave their homes.
Greece’s economy has also been hit hard by inflation and the euro zone’s currency has plunged, making imports increasingly expensive.
Its banks have been forced to shut down, and the country’s public debt has soared.
Growth has fallen to a record low of 1.6 percent in the first quarter of this year, and analysts say it could drop further.
It has been trying to revive its economy, but it has faced fierce opposition from the government and the EU, which has imposed harsh austerity measures in response.
The EU has been pressing Athens to cut public spending and reduce its debt.
A proposal from EU leaders last month called for the Greek state to cut taxes by 30 percent, reduce public spending by 30 billion euros and reduce public sector salaries by 30 million euros a year.
Gross public debt stands at 1.7 trillion euros, or $2.6 trillion, according to the IMF.GDP has contracted by 5.6 billion euros in the past 12 months, according the government.