The International Monetary Fund could be ready to cut off fresh funds to Greece, a step that would likely lead to default and getting bounced from the eurozone, reports der Spiegel. The big problem is that Greece has fallen so far behind in its austerity promises—made to secure $158.6 billion in help from the IMF—that giving Greece the additional time it is asking for would require a third aid package costing another $61 billion. "If Greece no longer meets its requirements, there can be no further payments," says Germany's economy minister. "For me, a Greek exit has long since lost its horrors."
Without the next round of aid, worth $38.4 billion, Greece could default as early as September. However, experts point out that as the eurozone treaties contain no provision for removing members, it's unclear what would happen after a member default. Meanwhile, international investors pelted Spain this morning, sending its 10-year bond yields soaring above 7.5%. "The higher the yield goes, the more untenable the situation becomes," says one analyst.