What options for Greece?

(BRUSSELS) - From quitting the eurozone to being placed for years on a foreign financial drip-feed, the outlook for Greece ranges from black to bleak, depending on how the parliament votes on Wednesday.

1. GREECE ADOPTS AUSTERITY

If Greece agrees to the austerity plan demanded by international institutions, eurozone finance ministers meeting on Sunday will release the next instalment of a 110-billion-euro bailout granted last year. Athens desperately needs this tranche -- 12 billion euros ($17 billion) in European and IMF loans -- to avoid defaulting on its debt in July.

Eurozone ministers will also work on a second financial lifeline for Greece expected to total around 100 billion euros. A final decision on the new bailout would be taken on July 11, with the IMF contributing again as well.

The second bailout could this time involve private creditors -- banks, insurers and pension funds -- who would be asked to participate voluntarily in saving Greece through a rollover of debt, where investors buy new bonds to replace ones that mature.

Even then, Greece's future looks uncertain.

In a best-case scenario, Greece sticks to the austerity programme and brings its public defict down to 1.0 percent of gross domestic product by 2015, well below the eurozone limit of 3.0 percent. This restores market confidence, allowing Greece to borrow again at reasonable interest rates. Greece, and the eurozone, are saved.

In a worst-case scenario, foreign aid is insufficient, austerity drags the country into deep recession and the government cannot meet its commitments. Europe devises a third bailout with new budget negotiations. The goal: avoid a default that would bring down other weak eurozone nations.

2. GREECE REJECTS AUSTERITY

The 12 billion euros in loans and the second bailout are withheld, precipitating the country towards bankruptcy. Although officials publicly insist there is no alternative plan, the eurozone is working on a "Plan B" to prevent a default. One option would be to provide emergency bridging loans to buy the Greek government time to negotiate a new austerity plan. Another possibility would be to speed up disbursements from the first rescue. The goal: beat the bankruptcy clock.

But several countries have lost patience with paying Greece's monthly bills, especially without a commitment from Athens to slash spending. In this scenario, creditors cut off funding. Greece declares in July or August that it cannot repay its debts. Greek banks, which hold government bonds, collapse and European banks are weakened. The European Central Bank must recapitalise. The debt domino falls, bringing down other eurozone nations.

The worst-case-scenario comes true: Greece becomes the first nation to leave the 17-nation eurozone.

This is an outlook tipped by some US economists such as Nouriel Roubini, who forecasts a collapse of monetary union within the next five years. In this scenario: either Greece's euro partners, tired of paying its bills, would elbow Athens towards the exit; or Athens, washed out by tough austerity programmes and facing social explosion in the streets, would throw in the towel and return to the drachma.

This would allow Greece to devalue to boost its exports but its currency would crumble. As the mountain of debts contracted by the state, businesses and households were in euros, Greece would find it even more difficult to pay back the loans and interest with a devalued currency. It would likely have to default on much of the debt, meaning it could no longer raise funds on commercial money markets. Other indebted nations would follow in the footsteps of Greece, leading to the implosion of the eurozone.