Greece bankruptcy looms amid deadlock
PM Alexis Tsipras was meeting with Greece’s lenders Thursday amid an ultimatum given to Athens to come up with a new austerity plan to get bailout or go bankrupt.
The European Commission, the International Monetary Fund and the European Central Bank had given Tsipras until 0900 GMT to draw up a new reform plan.
Greece owes IMF 1.6 billion-euro ($1.8 billion) which it has to pay by Tuesday. Athens says it cannot afford the payment unless its creditors unlock 7.2 billion euros in bailout money.
The lenders are demanding Greece adopt fresh austerity measures for pensions, labor markets, wages and taxation in order to get the money.
Tsipras is under pressures from Greeks not to budge because new compromises would mean further hardships for citizens already suffering under austerity plans.
The government says it has already compromised on its red lines by offering to raise taxes and cut pensions. It is calling for a debt relief instead.
The ruling Syriza party parliamentary spokesman Nikos Filis accused the lenders of “blackmail”, saying they were seeking to bring “annihilating measures back to the table”.
With both sides stubbornly entrenched in their positions, the specter of a default is looming large which could force Greece out of the eurozone.
The consequences of such an eventuality for the European Union are unknown and they could jolt world markets.
The deadlock coincides with a meeting by EU in Brussels Thursday to discuss immigration and renegotiate UK’s membership in the union amid differences.
Earlier this month, the daily Bild said the German government was weighing what to do if the Greek state went bankrupt.
Germany did not have a concrete plan on how it would react if Greece went bust, Bild said, adding much would have to be decided on an ad-hoc basis.
Four months of bitter negotiations with Greece’s anti-austerity government now appear going down the drain, with one eurozone official describing the loss of trust in the Greeks as "extreme".
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