Greece on the path to loan default

GREECE’S stock market took another hammering as the debt-burdened country inched closer to a default.

Greece has until the end of the month to agree terms for a financing package that will allow its economy to keep running.

But far-left prime minister Alexis Tsipras, who wants to shun austerity, has vowed to end the bailout programme – putting his country on a collision course with the rest of the single currency area.

Bank shares in Greece plunged following his comments yesterday, and the price of Greek government borrowing rose to its highest level since the height of the eurozone crisis in 2012.

Shares in the National Bank of Greece fell 10pc, Eurobank Ergasias was down 10pc and Piraeus Bank dropped by 14pc. The Athens stock market fell 4.7pc yesterday.

The National Institute for Economic and Social Research yesterday urged calm among European negotiators, who are meeting this week to try and avert a full blown crisis. Former US Federal Reserve chief Alan Greenspan has warned a Greek exit from the euro was ‘inevitable’.

Tsipras, whose Syriza party swept to power last month has also demanded that Germany pays war reparations to Greece.

Sigmar Gabriel, Germany’s vice chancellor and economy minister, yesterday responded by saying ‘the probability is zero’.