GREECE WILL COLLAPSE into a “state of emergency” if no deal can be struck to save the country from default, it has been claimed.
Germany’s EU commissioner, Guenther Oettinger, said European leaders needed to come up with a strategy to ensure basic services like energy and medical supplies, and funding for police continued if Greece couldn’t pay its debts.
“We should work out an emergency plan because Greece would fall into a state of emergency,” he said.
The embattled country has just two weeks to negotiate a solution with EU-IMF lenders and unlock a €7.2 billion tranche of bailout money to keep its public finances going.
Otherwise, the country will be in real danger of running out of cash to pay the latest €1.6 billion due to the IMF at the end of the month. That would leave it unable to borrow to pay for public services and would likely see it ejected from the euro bloc.
‘Major concessions’
Today the European Commission’s spokeswoman, Annika Breidthard, said Greece’s creditors had made “major concessions” to the debt-laden country, which has taken more than €240 billion in bailout money so far.
The two sides are at odds over the depth and scope of cuts the country will have to make to repair its budget, which its lenders fear has slipped into the red again as public spending outstrips tax and other income.
The country’s economy slid back into recession in May for the first time in over a year and last week the IMF pulled its team out of talks as Greek officials got a stern warning to stop “gambling” with the country’s future.
The new Syriza government was elected in January on a platform of ending unpopular austerity moves and it has reversed some of the previous, right-wing administration’s cost-cutting measures.
But it has also abandoned some of its election promises, like reversing privatisation plans for vital state infrastructure, while it tries to come up with an agreement.
- With AFP
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