Greece could exit euro and EU without bailout deal: central bank
The Greek central bank warned Wednesday that the country could crash out of the eurozone and even the European Union if it fails to reach a bailout deal with international creditors.
In one of the starkest warnings so far from a Greek institution, the Bank of Greece said: “Failure to reach an agreement would ... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and — most likely — from the European Union.”
Greece is due to make a 1.6 billion euro payment to the IMF at the end of the month, with another 6.7 billion euros due to the ECB in July and August — payments which Greek officials have said the government cannot afford.
With his options running out and his creditors saying his reform proposals are insufficient, Prime Minister Alexis Tsipras on Tuesday angrily accused creditors of trying to “humiliate” his Greece.
Elected on an anti-austerity platform in January, Tsipras has been reluctant to accept any further tax hikes and spending cuts.
European Commission head JeanClaude Juncker hit back by accusing Tsipras of misleading his own voters.
The Bank of Greece said that if the country left the 19-strong group of countries using the euro it would lead to a deep recession, dramatic declines in incomes and a spike in unemployment in the southern European nation.
In an increasingly tense situation, all eyes now turn to a meeting of the finance ministers of the 18-nation eurozone on Thursday.
Before that, the head of the In- ternational Monetary Fund (IMF), Christine Lagarde gives a speech in Brussels on Wednesday in which she is likely to respond to Tsipras’ claims that creditors want to bring Greece to its knees.
Eurogroup Election Delayed to
July by Greek Crisis
The election of the next president of the Eurogroup of eurozone finance ministers has been delayed until July because of the Greek crisis, current head and candidate Jeroen Dijsselbloem said Wednesday.
Dutch finance minister Dijssel- bloem and Spanish Economy Minister Luis de Guindos are the only ones in the running to head the Eurogroup, one of the biggest players in the debt talks with Greece.
The next meeting of the finance ministers from all 19 countries that use the single currency is set for Thursday in Luxembourg and will be overshadowed by the effort to reach agreement on the release of new bailout funds for Greece.
“I will propose to Eurogroup to hold the election in July. Greece requires all attention,” Dijsselbloem said in a tweet.