Greece may leave Eurozone over a failure to settle their debts

Global Business

Greece’s new anti-asuterity government refused to discuss its bailout with an EU and IMF committee on Friday. Critics said the debt talks failure could set the country on a collision course with its European partners and trigger another Eurozone crisis. CCTV’s Filio Kontrafouri reported this story from Athens.

Greece’s new Prime Minister, Alexis Tsipras began talks with the country’s European partners as he tries to renegotiate the country’s financial bailout. The new, leftist government has promised to end austerity with a series of feel-good policies that critics said could set the country on a collision course with its European partners and trigger another Eurozone crisis.

Greece may leave Eurozone over a failure to settle their debts

Greece’s new anti-asuterity government refused to discuss its bailout with an EU and IMF committee on Friday. Critics said the debt talks failure could set the country on a collision course with its European partners and trigger another Eurozone crisis. CCTV’s Filio Kontrafouri reported this story from Athens.

Greece appears to be on a collision course with its creditors. Greece halted two privatizations this week and vowed to go on a public spending spree-raising pensions and rehiring laid off government workers. It’s a promise that could push Greece out of the eurozone.

“The issue of Greece exiting the eurozone because of bankruptcy is not just an economic issue, which will cost Germany 70 billion euros, will cost France 44 billion, Italy 30 billion and so on,” Charalambos Gotsis, greek economist said. “It is mostly a political issue. The problem is that if the Eurozone loses a member, it will start disintegrating and then the markets will start betting on which country will leave next.”

The Greek economy remains on a knife’s edge. Athens defies eurozone conditions for more bailout funds, it needs eurozone cash to avoid defaulting on its debts.

One of the challenges for Greece’s new government has been keeping the cash flow going in the economy. This year, from its cash reserves, it will need about 20 billion euros just to service it’s debts.

Since coming to power, the newly-elected Syriza party has toned down its anti-austerity rhetoric.

“We are negotiating with security. We guarantee stability. Whoever is expecting otherwise, be sure that soon they will be proven wrong. Europe will move forward, it will move towards a better future, with more solidarity and mutual trust,” Alexis Tsipras, Greek Prime Minister said.

After meetings with Greece’s new government, EU officials said neither side wants a break.

“During our discussion I learnt something that is very significant. On the question of financing Greece’s debt, you will not deal with these issues unilaterally and you won’t deal with them on your own opinions and the opinions of the government,” President of EU Parliament Martin Schulz said. “You will deal with them within the framework of negotiations with your partners.”

Greece’s new government remains determined to renegotiate the terms of the bailout. If Tspiras fails to secure a new deal, Russia said it will consider offering a rescue package if Athens asks for one.