Athens accuses the former Yugoslav republic of harbouring territorial ambitions on the Greek province of the same name. It wants the name dropped, it wants Greek symbols removed from the state's flag and elsewhere, and it wants the border question settled. To make its point, Greece imposed economic sanctions against Skopje in February.
The move triggered intense anger from Greece's EU partners because they believed it was against European law and against policy objectives in the region. But they held back from any action, pending 'consultations'. When foreign ministers met in Ioannina two weeks ago, the 'consultations' were deemed to have happened. The attack on Athens was led by the German Foreign Minister, Klaus Kinkel. Not far behind was the Foreign Secretary, Douglas Hurd, despite Greek hopes that London would soften its stand in exchange for assistance on the EU voting row.
Hans van den Broek, commissioner for external political affairs, had attemped to negotiate a settlement. But the European Commission's patience snapped last week and it decided to take action against what it believes is a clear breach of EU rules. Next Wednesday, unless Greece backs down, the case will go to the European Court of Justice. A verdict, perhaps by the end of this year, is all but certain to go against Greece.
The Prime Minister, Andreas Papandreou, seems intent on continuing the consultation. But with European and local elections coming up and with enormous public backing, there seems little reason in the short term for him to compromise. And Kiro Gligorov, Macedonia's leader, is in a similar position. He is making capital out of the dispute and would, in any case, be disinclined to compromise while under the threat of sanctions, diplomats say. He too faces elections in November and is already having to make concessions to placate ethnic Albanian politicians. Sanctions help to excuse the country's dire economic situation.
Faint hope that things might turn lies in the invitation to foreign ministry officials from Athens and Skopje to New York for separate talks tomorrow with Cyrus Vance, the UN mediator in the dispute.
The US has again found itself the key player in an intra- European dispute. It was the US decision to recognise Macedonia, more than any other single action, which precipitated the Greek blockade. A US envoy, Matthew Nimetz, is shuttling between Athens and Skopje in parallel with the UN and EU efforts. Washington is also involved on the ground, with the number of US troops in Macedonia due to rise from 300 to 550 when a new detachment replaces Nordic troops, who are off to Bosnia.
The Greek lobby in the US has been a powerful influence on Mr Clinton. A group of congressmen led by the Maryland Democratic Senator, Paul Sarbanes, helped to make sure that he did not establish diplomatic relations with Skopje. Later this month, Mr Papandreou is due to meet Mr Clinton in their first such encounter, and this could be an opportunity to broker a deal.
Not for the first time, the European Union is emerging bloody and bowed from this dispute. Diplomats say that the wrong signals were sent from Brussels and other member states to Athens, letting Greece think it could get away with its actions. The court action is a recognition that the usual procedures for resolving these disputes have failed. Once again, it seems Europe cannot do without its American pacifier.