Greece may exit EU if bailout deal with intl. creditors fails
The Greek Central Bank has warned that the country may exit the eurozone and even the European Union unless it reaches a bailout deal with its international creditors soon.
"Failure to reach an agreement would...marks 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," the bank said in a statement, AFP reported.
The statement came after negotiations between the Greek government and the so-called troika of international lenders – including the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB) – hit a deadlock with the IMF delegation reportedly leaving the negotiations.
The two sides were in talks over the release of the last 7.2-billion-euro (USD-8.1-billion) tranche of Greece's massive bailout from the troika.
According to the terms of the bailout deal with international lenders, Greece should make a 1.6-billion-euro payment to the IMF at the end of the month, while another 6.7-billion-euro payment is due to the ECB in July and August. Geek officials have already announced that their country would not be able to make those payments.
Economic analysts have been warning for a long time that Greece’s default on its debt to international creditors may trigger a cascade of events which may lead to Athens’s exit from the eurozone, known as Grexit.
In an annual report addressed to the Greek parliament and the government, the Bank of Greece, said if the country actually left the eurozone it would face profound recession, sharp fall in incomes and a steep rise in unemployment.
"This is why the Bank of Greece firmly believes that striking an agreement with our partners is a historical imperative that we cannot afford to ignore," the bank said in a statement, adding, "From all the evidence available so far, it seems that a compromise has been reached on the main conditions attached to this agreement and that little ground remains to be covered."
Eurozone finance ministers are scheduled to meet on Tuesday in what many see as the final deadline to find a solution to the Greek debt crisis.
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