Greece remains defiant in the face of a possible “Grexit” from the European Union (EU), with Athens and its creditors attempting to avoid both defaulting and leaving the currency alliance, which Germany’s EU commissioner has referred to as a scenario that could create a “state of emergency,” Reuters reports.
Greek Prime Minister Alexis Tsipras has remained calm, even as “cash-for-reform” talks fell apart over the weekend, according to reports. Germany and EU partners, however, continue to insist that Greek negotiators take responsibility for their finiancial woes, and work with European partners to stay in the EU.
EU negotiators have insisted that Greece implement wage and pension reductions, while raising taxes to create revenue. Greek officials have rejected the proposals wholesale, leading Greek spokesman Gabriel Sakellaridis to announce that Athens has “largely exhausted our limits” when it comes to the negotiations.
If Athens does not secure terms with the EU, they owe the International Monetary Fund (IMF) 1.6 billion euros. The effect of not having a deal in place may cause Greece to go over the brink and be forced to default, analysts have said.
An EU official stressed the urgency of the situation to Reuters: “No more new proposals; take it or leave it time is upon us, I think. Or very close,” said the official.
Germany’s EU commissioner has warned that Greece will enter a “state of emergency” if the Grexit occurs. “Energy supplies, pay for police officials, medical supplies, and pharmaceutical products and much more” need to be paid for in case of economic collapse, he stressed.
Creditors insist that Greece must reform its skyrocketing pensions to become economically solvent. Experts in favor of pension reductions cite Greece’s young retirement age combined with its insolvent welfare state.