Greece could exit euro and EU with­out bailout deal: cen­tral bank

The China Post - - FRONT PAGE -

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.

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