Greece's future in EU in doubt if talks fail, central bank warns

Wed Jun 17, 2015 5:17pm EDT
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By George Georgiopoulos and James Mackenzie

ATHENS (Reuters) - Greece's leftist government faced a barrage of warnings on Wednesday that it risked being forced out of the euro zone and left without support if it failed to strike a swift aid-for-reforms deal with its creditors.

The Bank of Greece said the country's future in the European Union itself could also be at risk without a deal, underlining the extent to which officials who once refused any suggestion of "Grexit" are now openly discussing the prospect.

Despite urgent pleas, including from the White House, there has been little sign of movement since talks between officials from Greece, the European Union, European Central Bank and International Monetary Fund collapsed on Sunday.

Hopes of a breakthrough on Thursday at a meeting of European finance ministers, once seen as the last opportunity for an agreement, looked increasingly remote. Athens must find a way out of the impasse by the end of June, when it faces a 1.6 billion euro ($1.8 billion) repayment due to the International Monetary Fund, potentially leaving it bankrupt and on the verge of exiting the euro zone.

"People are getting anxious on both sides. Athens expects Brussels to move. And Brussels expects Athens to move. And it's stuck," said a senior EU diplomat, who declined to be named.

"It's very dangerous, and we may have an accident."

A top Greek negotiator told Reuters that Prime Minister Alexis Tsipras' leftist government was ready to make unspecified concessions but he once again ruled out any cuts to pensions - a major sticking point in the negotiations.

In Germany, Europe's biggest economy, government and central bank officials said it was up to Greece to move.   Continued...

Tourists watch the Presidential Guard in front of the parliament before a pro-government rally calling on Greece's European and International Monetary creditors to soften their stance in the cash-for-reforms talks in Athens, June 17, 2015. REUTERS/Yannis Behrakis