MUNICH — The euro-zone countries have now agreed to provide some 80 billion euro in cheap loans to Greece over the next three years, and hope that the International Monetary Fund will provide another 15 billion euro at the least. But the interest rate that Greece must pay buyers of its government bonds has shot up to a record-high level of nearly 9 percent — 5.9 percentage points above the benchmark rate paid by Germany. That translates into an additional 16 billion euro per year in interest payments on Greece's current debt of 273 billion euro. Obviously, markets still believe that Greece will default on its debt.

Greece, moreover, has another huge problem: Its current-account deficit is currently a whopping 13 percent of net national income, which means that 27 billion euro have to be financed annually by borrowing or selling Greek assets. With international investors no longer willing to finance this deficit, and even shying away from refinancing existing Greek debt, only three possibilities remain.

The first is that the EU provides the necessary funds on a permanent basis, creating a "European Transfer Union" to the benefit of the deficit countries, including Portugal, Spain, Ireland and Italy. The second option is for Greece to go through a depression, reducing its wages and prices. Finally, Greece could leave the euro and devalue its currency.