Greek debt drama is 'theater,' but stakes are high

The ongoing drama surrounding Greece's efforts to drum up support for a new debt deal is just "theater," according to one analyst, who warned that Europe needs to wake up.

Greek Finance Minister Yanis Varoufakis met his German counterpart Wolfgang Scheuble in Berlin on Thursday, after a week of travelling across Europe to try and bolster support for a new debt deal and bailout conditions. The talks were a mixed success, however, with Scheuble saying that the ministers had "agreed to disagree," but Varoufakis denying that this was the case.

With no apparent progress over a debt deal for Greece, despite a week of high profile meetings between Varoufakis and Greek Prime Minister Alexis Tsipras and their fellow euro zone ministers, there is growing speculation over the eventual outcome.

The media has been following Greece's new government closely this week, with investors eyeing whether the country can persuade Europe to agree to restructure its massive debt pile. For its part, Greece dropped calls for a debt haircut earlier this week, appearing to backtrack from the more extreme anti-austerity rhetoric it used when it first came to power less than two weeks ago.

Adding to the drama was the European Central Bank's (ECB) decision to revoke a waiver that allowed banks to use Greek government debt as collateral for loans, saying it was no longer able to assume there would be a successful conclusion to the Greek government's bailout program review.

The Greek saga could be viewed as farcical -- if only the stakes weren't so high. The Greek government is under pressure to find a solution to its funding situation, as its bailout program is due to end in February and there is still a tranche of funding it has not yet received.

The country's international creditors have refused to release the funds until Greece makes a commitment to continue with the conditions of its bailout – which include tough austerity measures -- meaning that Tsipras has to choose between angering Greek voters by reversing pledges, or lose access to vital funding.

The decision will also have a market impact. Greece's borrowing costs leapt and its financial stocks tanked on Thursday after the ECB's said that banks couldn't use the country's debt as collateral late Wednesday.