The first two weeks after Syriza’s victory in the Greek elections had the effect I feared. A sceptical northern European public was converted into a hostile one.

We saw Yanis Varoufakis unilaterally dismissing the troika – the technocrats who oversee Greek economic policy. We followed with amazement how the Greek finance minister staged a grand European tour like a rock star. We saw him walking into a meeting with hedge-fund managers in London and posing outside Downing Street. By the time he reached Berlin on Thursday, German politicians and the media were more hostile than ever. By Friday, Athens found itself isolated at a meeting of finance officials in Brussels.

Politically, the situation is now as bad as it was in 2010 when the Greek debt crisis began. It was an utterly disastrous week of economic diplomacy. All that separates us from “Grexit” are a few more weeks like that one.

Greece and its European creditors have only a few days left to decide how the country can get through the next four months. European finance ministers have to agree a compromise at a meeting on Wednesday if the funds to cover the government's spending commitments are to be in place by March. And only when that happens will Athens and its creditors begin to talk about the really important stuff – like the future of the Greek economy.

Thanks to a decision last week by the European Central Bank to increase the ceiling for emergency liquidity assistance, the Greek banking system will be protected until then – although not for much longer. This leaves the question of short-term funding as the main priority.

Drama

Mr Varoufakis

has, in essence, four options or a combination of them. Each of them is opposed by at least one of the key actors in this drama.

The first is an extension of the existing programme. That would be procedurally the easiest of all, acceptable to everybody – except the Greek government. Mr Varoufakis already ruled this out because Syriza just won an election on a promise not to do precisely this.

Some people say he might be bluffing. He may still end up agreeing to reforms and suffer the humiliation of the hated troika descending on Athens once more. The single concession: a series of new, cuddly names. Watch out for euphemisms in which programmes become contracts, the troika turns into a consultant, and austerity becomes growth-friendly consolidation.

I suspect Mr Varoufakis will not blink. And even if he accepted it, the Greek parliament might not.

Option two is more attractive for him. He could demand, not unreasonably, that the ECB release interest payments and profits from purchases of Greek government bonds during the crisis. These funds are currently on hold. Even if released, this would not be enough.

Mr Varoufakis will also need to ask the European finance ministers to agree to lift the ceiling of treasury bills the Greek government can issue. It was imposed so that Athens would not issue too much debt during the bailout. If Greece does not accept a new programme, a lifting cannot be taken for granted.

The third option is simply to find the money elsewhere. Not that many sources are available. Moscow has signalled readiness in principle to help, clearly not out of humanitarian compassion. Russian money would come at a heavy political cost for Greece. Even for the Syriza government, this is not a preferred choice, at least for now.

Parallel currency

The fourth option is to issue a parallel currency, redeemable only domestically, to fund government spending – essentially an IOU. This would be the most extreme option, but it would take care of the funding problem. It could easily be construed as a preliminary step to Grexit – a departure from the euro – or even as an act of Grexit. What is the meaning of a single currency when you have two of them?

Difficult as it may be to secure short-term funding, it is nothing compared to the big debt talks that lie ahead. I see no debt reduction, and only marginal scope for a fiscal relaxation of any kind. The biggest opposition will not come from Germany but from other periphery countries, such as Portugal, which did not revolt against the troika. A moment of truth is approaching in the eurozone crisis – but not quite this week. – Copyright The Financial Times Limited 2015