Alexis Tsipras
Greek Prime Minister Alexis Tsipras has tough decisions to makeReuters

Another day, another instalment of the Greek crisis. The country has supposedly been "on the brink" of default, of a Grexit or of full blown economic Armageddon countless times over the past few years, but it may finally be coming to a head.

"We have always argued that a Greek deal would only occur at one minute to midnight; yet it now looks like 23:58 and counting," said Michael Every of Rabobank.

Greece has only two weeks left before it must repay €1.6bn (£1.16bn, $1.8bn) to the IMF, and crunch weekend talks with its creditors ended in failure. The broke country needs to unlock bailout funds to pay down debt and keep the country running, but Prime Minister Alexis Tsipras has rejected demands from the EU and the IMF to instigate reforms, such as pension cuts, as he flirts with disaster.

Perhaps the starkest indication that the end is nearing are the words of German Vice Chancellor and Economy Minister Sigmar Gabriel. He has been quoted as saying that "the shadow of a Greek exit from the eurozone is becoming increasingly perceptible" and that "repeated apparently final attempts to reach a deal are starting to make the whole process look ridiculous, there is an even greater number of people who feel as if the Greek government is giving them the run-around".

However, it is important to remember that default does not necessary mean a Grexit.

Tsipras has so far resisted the intense pressure placed on him by creditors, which has gone down extremely well with the Greek electorate and helped keep his personal popularity ratings high.

But it may ultimately be politics which decides the outcome.

"The Greek banking sector is now totally dependent on the emergency liquidity assistance provided by the ECB, which gives the European authorities a very strong bargaining chip as any reduction of this support will very quickly push Greece towards capital controls and extended bank holidays, which in turn will make the ruling Greek government very unpopular," said Lombard Odier's Salman Ahmed.

The prospect of civil unrest aimed at Tsipras's leftist Syriza party could force his hand, although backing down now is also a huge political risk. He must find a way to strike a deal and save face, a fine balance.

Ahmed added that he expects "a deal of some form to happen before the end of the month, given how damaging the alternative is for both sides".

The damage is already being felt. The FTSE fell to a three month low this morning (15 June), mirroring the weak performance of stock markets around the world, on news of talks breaking down.

Every added: "Failing any fresh sign of compromise from either side, it is likely that the market will prepare for a scenario of Greek default over the next couple of weeks."

The next "key date" in the saga is 18 June, when attention will turn to a Eurogroup meeting where the IMF's Christine Lagarde is also expected to attend.