The European Union (EU) and International Monetary Fund (IMF) are demanding yet more austerity in Greece.
They want to punish it for missing the impossible targets they have set.
Greece’s government, led by left party Syriza, has already pushed through massive cuts and privatisations in exchange for Greece’s third bailout.
Unions promise a 48-hour general strike as soon as a planned pension reform reaches parliament.
In a repeat of last year, the cash-strapped government is having to raid pension funds to pay wages.
The extreme sacrifices forced on Greek workers to pay for the bankers’ crisis have now wiped out the country’s deficit.
But that’s not enough for its creditors.
They want a 3.5 percent budget surplus by next year.
This means the government would have to receive in tax far more than it spends.
No one thinks this is possible. So the EU and IMF are demanding another £2.8 billion of “contingency” cuts are passed through parliament now so they can be made quickly when the target is missed.
Syriza rightly refuses. It hopes that if it calls their bluff they will offer debt relief.
But this is a repeat of the strategy that failed last year.
Meanwhile, both Spain and Portugal could face big fines within weeks after breaking EU deficit rules by not making cuts fast enough.
The European Commission is expected to offer them more time rather than spread the deepening Greek crisis.
The prospect of a new standoff over its enforcement of austerity at the same time as the referendum in Britain is a nightmare for EU rulers.