The problem is not merely a matter of time. It is also a matter of money. Given Greece’s deteriorating economy, the next bailout will require more than previously estimated — perhaps topping €50 billion. It will be hard to persuade other eurozone nations to cough up this sort of cash, not least because good will toward Greece has almost vanished.

Given such a gloomy prognosis, it is important to examine alternatives. There are two: default and leave the euro, or default and stay in the single currency.

The latter would be the least bad option, though far from good. To minimize the damage, the government would have to recapitalize the banks, as a default by the government would tip them into insolvency, too. If they weren’t recapitalized, the European Central Bank would cut off liquidity, the banks would go bust and the economy would be dragged further into the abyss.

The snag is that Athens would not itself have the cash to bail the banks out and wouldn’t be able to get any money from abroad either. The only solution would be to “bail in” depositors — converting a portion of their savings into new equity in the banks.

Although the banks are not very exposed to the government, they would also need to be recapitalized to take account of the fact that more loans to the private sector would turn sour.

If Athens defaulted, it would also have to live within its means. Although the government would no longer need to find cash to pay its creditors, it would still have to cut salaries and pensions because tax receipts would fall in line with the deteriorating economy.

Some pundits, including Martin Wolf, of The Financial Times, suggest that Athens should instead pay salaries and pensions by issuing i.o.u.s. This would be a bad idea because, whatever the government said, the Greek people would see these i.o.u.s as the precursor of new drachmas and would discount them heavily.