Greece’s central bank warns of painful exit from the Eurozone

Posted February 14th, 2019 by admin and filed in 杭州夜生活
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In its annual report to parliament, the bank said an exit from the eurozone would mean wiping out everything the Greek economy has achieved since becoming an EU member.


The Ancient Greek playwright Euripides once wrote: “A brave man’s choice is danger.”

The sentiment may be particularly pertinent when it comes to the Greek government.

In Athens thousands gathered outside Parliament House urging Prime Minister Alexis Tsipras to keep up the fight against Europe and the International Monetary Fund.

In recent days he’s accused them of wanting to impose ‘more humiliating’ austerity measures in exchange for further bailout funding.

In less than a fortnight Greece is due to repay more than two billion dollars in loan repayments to the IMF, and promise further economic reforms to secure more funding.

Creditors want Greece to cut its pension spending by one per cent of GDP and widen its base for value-added taxes.

But Greece doesn’t want any cuts to pension payments and is refusing to allow taxes on things like medicine and electricity bills.

Prime Minister Tsipras says all Greece wants is an “honourable compromise”.

“If Europe insists on this incomprehensible option, then they must bear the cost of developments that will not be beneficial for anyone in Europe. The Greek government does not wish this.”

It comes on the eve of a key meeting between Eurozone finance ministers in Luxembourg that many say is a good chance for all parties to reach a solution.

But Greece’s Finance Minister, Yanis Varoufakis, disagrees.

“I do not believe so. Eurogroup meetings are not designed to stage fresh conversations that have not been prepared in advance. I do not believe this preparation has taken place and also it’s my considered opinion that now the agreement has to be reached at a level of political leaders, heads of state, prime ministers, chancellors.”

As the pressure builds Greece’s Central Bank has made a stunning admission in its annual report to parliament.

For the first time it’s warned the country could be on what it calls a “painful course” to default, which would ultimately lead to Greece’s exit from the euro currency and, possibly, the European Union itself.

The bank says more than 44 billion dollars has been withdrawn between October and April and, if a deal isn’t reached, Greece’s economic woes will accelerate.

The concerns are shared by United States Federal Reserve chairwoman Janet Yellen, who says the global economy could also see significant turmoil.

In an interview with CNN, a clearly agitated European Commission President, Jose Manuel Barroso says an agreement is only possible if the Greek government changes its tune.

“From the beginning they seemed not to cooperate with all the other parties. It’s the first time in my life I’ve seen one government completely isolated from all the other governments. In the European Union decisions are taken at the end by some kind of compromise. But it’s really a tragedy what’s happening. We’ve done everything we can to avoid a Greek default and now the Greek people have done all efforts, remarkable efforts and went through extreme sacrifices, it’s really a pity if all these sacrifices go to waste and Greece doesn’t achieve an agreement with its partners.”

But talks of a Greek exit have been dismissed by one of Greece’s top negotiators.

Euclid Tsakalotos has admitted the country doesn’t currently have the funds to pay the IMF by June the 30th.

But it is ready to strike what he calls an “economically viable” deal — as long as pension cuts are replaced with pension reform.

“What is unacceptable is pension cuts in a country where two-thirds of pensioners have pensions near the European poverty line. Because Greece has so much unemployment – 25 per cent unemployment, over 50 per cent in young people – a granny’s or a grand-dad’s pension has to feed, in many cases, the whole family. So it seems to us utterly reasonable that pension cuts should not be on the agenda.”

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