The Malta Government has refrained from making comments on the Greek debt issue, and given the chronic extent of the mess and the varying suggestions to ‘solve’ it, one can sympathise.

Greece really is on the edge of the abyss. It has not returned to growth, it has not yet been able to borrow off the commercial markets and its Socialist government led by George Papandreou has yet to push through a raft of austerity measures in the midst of growing public discontent and paralysing strike action.

There are apparently, according to a briefing paper circulated by the European Commission, three options on the table. But this must be taken into the context of various eurozone member states having their own banks are exposed to Greek bonds, investment and debt trading.

Greece needs more cash. One way that the eurozone is suggesting to solve the problem is by voluntary debt exchange. The proponents of the idea believe that with 100% participation, it would avoid having Greece borrow more liquid funding. However, this all sounds too simple and could set a precedent whereby the rest of the eurozone would have to prop up the whole Greek economy. This is unacceptable. Apart from the obvious risk of countries being exposed to Greece’s tattered economy, negative growth and outright endemic corruption, it could trigger the final bond downgrade – which would mean that Greece would become, quite literally, bankrupt.

The other two options are forms of debt rollovers - effectively meaning “we will pay you later”. It all sounds terribly simple, considering that Greece is perilously close to financial and economic collapse. It is hard to believe that for all the discussions, all the money down the drain and all the solidarity with Greece’s corrupt civil service, that the eurozone is even considering giving them more money and more indirect financial support.

The Greek people are out in their droves, baying for blood and screaming bloody murder at the civil service “thieves”, which they are hounding in Athens in the form of protests and demonstrations. The truth of the matter is that Greece is beyond salvation. The problem was always termed to be one of liquidity, but it has become increasingly clear that the problem is actually insolvency. Greece had fudged its books for so many years that its deficit and public debt had exploded and became virtually impossible to rein in. All the while, wages and salaries have increased, and there is no way that any Greek citizen will relinquish a cent.

Billions have been poured into Greece, in the hope that its ‘liquidity’ could be restored over a two year period. That ‘liquidity’ has never been restored – in fact it has gotten worse. Greece cannot afford to borrow off the markets. It also cannot borrow any more, it would be tantamount to a handout. While it has not been declared to be officially in default – it is just a matter of time before the whole economy is declared insolvent. What then?