"Brother, can you spare a billion Euros?" 1.6 billion to be exact, that's the check that Greece is due to cut the IMF tomorrow. It appears that the money to pay it isn't there barring some outside help.
Greece and the EU are working out a long-term deal, but the deal the EU wants is looking to cut the budget deficit (including trimming pensions and raising the VAT [sales tax]) more than the hard-left Greek government is willing to stomach. The government would like forgiveness on some of the debt, seeing the situation as untenable for the long haul, and is holding out for a better deal.
Thus, we're in the midst of a full-blown financial crisis, with banks only allow withdrawals of 60 Euros a day so that they aren't cleaned out by depositors. Other capital controls are also on, so doing business with or in Greece is problematic for now.
One drama point is a hastily-called referendum Sunday on the EU deal. It will put the last-best deal put on the table by the creditors to a vote and also serve as a vote of no-confidence in the Syriza government, as PM Tsipras has vowed to resign rather than be the one to be in charge of taking the banker's pound of flesh out of the little guy.
The vote has been said to be of dubious constitutionality (not being any Greek constitution wonk, that may well be true), but it least has the merit of having the people get a direct say in the matter, something often in short supply in EU politics.
How this plays out will be an interesting chapter in international economics and finance. I can recall a quarter century or so ago, when I was taking my international econ classes at Kent State (I have a doctoral minor in it) and the Maastricht Treaty was hot off the presses; it set up the framework for creating what became the Euro.
The theoretical trick of making a currency union go was to have a common monetary policy and a common fiscal policy. The European Central Bank, the Eurozone's analog to the Fed, serves the first purpose, and has worked reasonably well (your mileage may very, but it hasn't been a disaster). However, the rules of the game also assume that countries aren't running huge deficits that can send inflation and high interest rates to the rest of the bloc.
Enforcing fiscal discipline has been the EU's glaring weak spot on this front, as they were something of a paper tiger in holding Krugman wannabes accountable. We're seeing that coming to a head this week, as a Greek debt that would take serious surpluses to pay off has stepped on the edge of the breaking point.
It will be an interesting week for a foreign policy and international econ geek. Messy, but interesting.