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Greece Could Exit Euro and EU Without Bailout Deal: Central Bank

source: AFP

“In one of the starkest warnings so far from a Greek institution, the Bank of Greece said: ‘Failure to reach an agreement would... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and — most likely — from the European Union.’

Analysts have long warned that a default may set off a chain of events leading to a messy exit from the eurozone, a so-called Grexit, but not the country leaving the EU altogether.

Negotiations over the release of the last 7.2 billion euros ($8.1 billion) in rescue funds from Greece's massive bailout from the International Monetary Fund, European Union and European Central Bank are deadlocked as payment deadlines loom.

Yet while the atmosphere between Greece and its creditors has deteriorated in recent days, the Bank of Greece insisted that the two sides were not that far apart, with only ‘little ground’ between them before a deal could be struck.

Greece is due to make a 1.6 billion euro payment to the IMF at the end of the month, with another 6.7 billion euros due to the ECB in July and August — payments which Greek officials have said the government cannot afford.

With his options running out and his creditors saying his reform proposals are insufficient, Prime Minister Alexis Tsipras on Tuesday angrily accused creditors of trying to ‘humiliate’ his Greece.”

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