Greek bankruptcy looms as EU gives new warning on debt
GREECE has been given a new warning by European leaders as the country hurtles towards a disorganised bankruptcy putting a question mark on its future in the eurozone.
Speaking at a joint press conference in Paris with French President Nicolas Sarkozy, German Chancellor Angela Merkel warned that Greece will not receive any more EU aid until it reaches a deal with the EU/IMF/ECB troika on tightening up its budget.
Greece has already missed deadlines imposed on talks with agreement necessary on cuts to release €130bn in EU/IMF/ECB bailout funds.
The country is also due to make €14bn in bond repayments next month which it cannot afford.
“We want Greece to stay in the euro,” Ms Merkel said.
“To say it clearly, this is the opinion of both of us. But I also say -- there can be no new Greece programme if agreement is not reached with the Troika ... All those who bear responsibility in Greece must know - we will not deviate from this position.
“I want to make clear once again that there can be no deal if the troika proposals are not implemented. They are on the table, time is of the essence. Something needs to happen quickly. I support, as the French president has, the idea that the necessary interest payments for the debt be paid into a separate account ...”
Mr Sarkozy said: "The Greeks gave us undertakings. They should respect them scrupulously. There's no choice, time is pressing. It's a matter of days. Now we need a deal.”
Talks to avert a Greek crisis were ongoing today between coalition party leaders.
The measures include a €100bn write-off of private sector debt.
Many Greeks have been badly hit by austerity measures and riots have disrupted the capital on numerous occasions.
"I am not going to contribute to a revolution that will humiliate us and that will burn Europe", said leader of the far-right Laos party Giorgos Karatzaferis.
The leaders of the other two parties in the coalition also said they were opposed to further cuts.
The euro was down this morning as were European stock markets.
"The truth is that we are already past the deadline," said EU euro commissioner Olli Rehn's spokesman Amadeu Altafaj.
Fears that Greece will not accept the terms of the bailout called a halt to a share rally.
It is expected that coalition talks, headed up by Greek Prime Minister Lucas Papademos, will continue tomorrow.
The FTSE 100, Germany’s Dax and France’s CAC were all off today.
In the US, the Dow Jones industrial average was down 0.36pc at 12,815.50 in early trade.
The euro fell 0.4pc to $1.3060, having hit a low of $1.2026, according to news service Reuters.