Warning: Greek drama is far from over

EU Commission VP: Greece may need third bailout
EU Commission VP: Greece may need third bailout

Hold that sigh of relief, Greece is not safe yet.

Greece depends entirely on international support and its creditors are not too impressed. Mario Draghi, the European Central Bank's president, revealed Thursday that its loans to Greece had more than doubled over the last month or two -- to about €100 billion. That's the equivalent of 68% of Greek GDP, the worst ratio in the eurozone.

The ECB also raised the amount of emergency support to the country's banks by €500 million.

Greece disappeared from the headlines after Europe and the International Monetary Fund (reluctantly) last month promised Greece four more months of financial support.

In return, the anti-austerity government in Athens pledged to pay its debts on time and in full, and to craft reforms acceptable to its creditors by the end of April.

But there has been little sign of progress on the reforms. Finance Minister Yanis Varoufakis has vowed to continue fighting austerity that he believed caused the Greek economic crisis.

Draghi said Greece has to stick with the reform program if it wants to be able to access European money in the future.

Related: Three reasons to cheer Europe's economy

Meanwhile, there have been reports that the government may not have enough money to repay more than 6 billion euros in short-term debt and IMF loans due in March.

Draghi made it clear the ECB will not dodge its own rules and raise Greece's limit on short-term debt issuance, so the government will have to come up with an alternate source of financing.

And earlier this week, Spain publicly raised the prospect of Greece needing a third bailout once the existing lifeline expires in June.

The bottom line: The crisis could flare up again. Europe is better equipped than it was in 2012 to prevent a Greek default from triggering a wider crisis, but it would still deal a heavy blow to confidence.

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