It seems today that the Eurozone is incompetent to settle the deepening crisis in Greece as evidenced by the record increase of the nation’s public debt, which has touched 176 per cent of gross domestic production in spite of all austerity measures taken by it. It is a surge that none of the European Union (EU) countries has ever experienced.

It has been said enough times that solving the Greek financial crisis through injecting more funds will not work or even contribute to ironing out the structural crisis. Instead, that would rub more salt to the self-sustained injuries and place further burdens on both Greece and the EU. And this is exactly what happened.

The sovereign debt has shot up to €311 billion ($353 billion) and the government is now incapable of increasing revenues to fulfil its financial commitments to pay off loans and the interest accrued on them.

The Greek crisis, as can be gauged from the recent meeting of the Eurozone’s ministers of finance, seems to have gone back to square one amid sharp disagreement between the strongest pillars of the union — namely France and Germany — on how to deal with the crisis.

The latter objects to writing off some of the debts, a fact that is magnified by Germany being a key fund provider. This objection is backed by the chairman of Eurozone and Dutch minister of finance, who refused to cancel any of the debts. However, France alongside Spain has demanded cancellation of some debts so that Greece can overcome its crisis.

On the other hand, the International Monetary Fund is threatening to pull out of Greece rescue plan after being fully convinced that the bailout process is fruitless. It is trying to transfer Greek debts to the European Stability Mechanism (ESM) — a move that has been rejected by Germany but sought by IMF chief Christine Lagarde.

This means the Greek crisis will go through more difficult phases due to the limited government capacity and wild disagreements between various parties, whether from inside the EU or between the EU and other international parties.

Until further notice, going ahead with progressively spending money from the remainder of the third Greek bailout package — amounting to €86 billion — will remain highly controversial and if continued, it would not iron out the intensified crisis since no significant progress has been made since the beginning of the bailout.

First, the Greek government is no longer able to take austerity measures to increase revenues as further measures would result in economic and social implications. Its economy has clearly run out of steam. Greece was never quite ready when it joined the Eurozone.

Therefore, Germany’s and the Netherlands’ calls to take new austerity measures for the sake of new loans are impractical, and will create economic and social chaos. In addition, cancellation of some debts will not resolve the crisis but will incur on donors and financial institutions massive losses.

Obviously, there remains a difficult solution for Greece, the Eurozone and the IMF, which is declaring bankruptcy by Greece for not being able to fulfil obligations and thereby exiting the Eurozone. This would be a major setback that could probably push other countries suffering from financial crisis — such as Italy and Spain — to take similar measures, which means a collapse for the entire system.

Will that happen? Although it is difficult to predict, all possibilities remain open and declaring bankruptcy by Greece seems to be the only way out. So, Germany and France should take action to prevent the crisis spilling over elsewhere in the Eurozone and to maintain the cohesion of their currency. This is the only way to maintain the united currency.