Eurozone finance ministers Wednesday scrapped a planned meeting in Brussels that they had called to approve the new bailout and a related debt restructuring plan.

The continued failure of Greece’s political leaders to commit to the bailout’s tough terms after April elections has been cited as the reason for the delay in Wednesday’s scheduled meeting, according to Jean-Claude Juncker, the Eurogroup President.

It has appeared that further technical work between Greece and the troika is needed in a number of areas, including the closure of the fiscal gap of 325 million euros in 2012 and the debt sustainability analysis, Juncker, who is also Luxembourg's Prime Minister, said in a statement. Furthermore, I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme, he added.

Last weekend the Greek Parliament took an important step by approving new austerity measures, sparking violent protests. Meanwhile the data published by the Greek statistical agency on Tuesday showed that the economy, reeling from government spending cuts and other austerity measures, shrunk by about 6.8 percent last year. The total GDP drop since the end of 2007 is more than 16 percent.

The steep contractions are fueling criticism of the strict austerity policies adopted across the country in response to the debt crisis. Economists argue that continued government spending cuts will make it even harder for the country to recover.

Athens will cut the private-sector minimum wage by 22 percent and abolish 15,000 public jobs this year. When consumers and businesses cut back on spending to reduce debt, someone needs to fill the gap in output.

The delay in the meeting of eurozone finance ministers certainly deepens the risk that Greece will be forced into a full-scale default next month when a €14.5 billion ($18 billion) bond is due for repayment.

At the same time if Greece defaults, the consequence can be devastating. In such a scenario, Greece will have to abandon the euro and restore its old currency, the drachma. If Greece exits the eurozone, its banks will go bust, foreign exchange will be scarce and rationed, inflation and unemployment will soar.