Greek Default 'Inevitable': Former Government Minister

As strikes threatened to bring struggling Greece to a standstill Wednesday, pessimism about the future of the euro zone--in its current form, at least--continued to plague the Continent.

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Speculation that the Mediterranean country would have to default on its debt repayments has grown in recent days, after the government there announced that it will not meet deficit reduction targets for 2011.

If Greece were to default, it would hit the balance sheets of many European banks, and potentially even lead to the end of the euro[EUR=X 1.3304 -0.0043 (-0.32%) ] itself.

Petros Doukas, a former Greek deputy finance minister, told CNBC Wednesday that default is "inevitable" and called for an "organized" and "orderly" haircut on the debt to try and stop a run on the banks in the event of a default.

"The capacity of the Greek people to pay taxes is really at the limit," he said. "People like me are paying taxes out of their savings and by selling off assets, not by generating new income."

Greece needs to reduce its deficits and start selling off state-backed assets in order to meet the terms of a second bailout by the International Monetary Fund (IMF) and the European Central Bank, agreed upon in July. However, the Greek protestors are chafing at government-imposed austerity measures. Read more