In a press release earlier this month that surprised few, the Greek Finance Ministry announced that the country would not be meeting its deficit targets as stipulated in its bailout agreement. Greece's deficit is expected to top 8.5% of GDP, even as the Greek state has enacted massive spending cuts.
Unfortunately, Greece has found itself in a bit of a downward spiral. When it enacts austerity measures to cut expenses, it deepens the recession and causes tax receipts to fall faster. "Expenses" to the Greek state are "income" to many Greek citizens.
Greece's lenders may have mercy on the country and extend the next installment of its bailout package. Or voter unrest at home may force Germany and the other lender states to cut off Greece's lifeline and simply deal with the consequences of default on their own banking systems.
But whether it happens today, tomorrow, or next year, a Greek default is a virtual certainty at this point.