Both sides are waiting for the other side to blink first. In the end, they will probably blink together at the exact same time. But let's assume that only one side blinks. Who might that be?
Chances are that the EU will blink first.
Prime Minister Papandreou feels very lonely nowadays when he explains to his parliament and the voters why Greece should accept more financial help. The Greeks know by now that - one way or another - they cannot be spared the extreme adjustment pains which Greek society will face in the next years. Will they simply accept that or might they say "ok, we will suffer but you will suffer with us".
The problem is that Greece has the better hand in this poker for the simple reason that with the current structure of "financial help for Greece", the Greeks have not much to gain other than maintaining their status as a "respected member of the EU which honors its obligations". While that would appear as a very important gain for viewers from the outside, it wouldn't help those Greeks who suffer already very much, at least not in the short term.
The EU, on the other hand, has a lot at stake. Mind you that this is not a problem which came up overnight. Instead, it has been on the table for almost 3 years. The EU has been unable during this time to come up with anything more by way of solutions than stop-gap measures in the hope that the problem will go away by itself. If the situation were to now blow up now, investors world-wide would begin to wonder what the EU and the commen currency are really all about. And in that situation of chaos, no one could tell what would happen. However, in the worst-case-scenario, it could even happen that savers in Central European countries become panicky and start withdrawing their Euros from their banks. In late 2008, a similar confidence crisis was in the making but countries like Germany faced it by issuing unlimited state guarantees for all deposits. At that time, the states had far more credibility with the savers than they do now.
What if the savers grab for the cookie jar instead of, once more, believing politicians who have shown every reason in the world during these last 3 years that they do not deserve that confidence?