17 Jun 2015
Greek Central Bank warns of ‘uncontrollable crisis’ in case of no deal
FXStreet (Córdoba) - The Greek Central Bank warned on Wednesday that the country will be plunged into an unprecedented slump unless a deal is agreed soon.
In a report 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 a Grexit from the euro area and the European Union.
“A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring”.
On Thursday, Eurogroup leaders are expected to meet but it seems both sides are unwilling to make the necessary compromises to reach an agreement that will unlock funds for Greece. Athens has to repay the IMF €1.6 billion at the end of the month.
Earlier today, Greek Prime Minister Alexis Tsipras said that he would give Europe the “big no” if Greece doesn’t get an honourable compromise from institutions while accusing the creditors of trying to "humiliate" his country by demanding more cuts.
Meanwhile, according to German Forgeign Minister Greece doesn't plan to present a new proposal at the Eurogroup meeting tomorrow.
In a report 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 a Grexit from the euro area and the European Union.
“A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring”.
On Thursday, Eurogroup leaders are expected to meet but it seems both sides are unwilling to make the necessary compromises to reach an agreement that will unlock funds for Greece. Athens has to repay the IMF €1.6 billion at the end of the month.
Earlier today, Greek Prime Minister Alexis Tsipras said that he would give Europe the “big no” if Greece doesn’t get an honourable compromise from institutions while accusing the creditors of trying to "humiliate" his country by demanding more cuts.
Meanwhile, according to German Forgeign Minister Greece doesn't plan to present a new proposal at the Eurogroup meeting tomorrow.