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Greece 'on the brink'?

Wednesday, June 17, 2015 - 01:43

The Greek central bank has warned the country will be put on a ''painful course'' if the government and its international creditors fail to reach an agreement on an aid-for-reforms deal. David Pollard looks at the latest developments.

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The spirit of defiance lives on. At least, for local government employees raising this banner in Athens. But the headlines read differently - many talking of a country on the brink. That's a sentiment that rings true on the streets. (SOUNDBITE) (Greek) 40-YEAR-OLD SCHOOL TEACHER, LYDIA PAPADIMITRIOU, SAYING: "The situation is incredibly unstable. It's a gamble. I don't know what to say but of course I am very worried." (SOUNDBITE) (Greek) 22-YEAR-OLD STUDENT, ELENI, SAYING: "A Grexit could happen, and the result of that would be really bad. I don't know what to say. We'll see." Those fears are becoming official. The morning after prime minister Alexis Tsipras told parliament his country was being humiliated by its creditors, the Greek central bank is warning of a "painful course" ahead. Default, exit from the euro - and deeper recession - all possible if Athens fails to strike a deal with its paymasters. For investors, it's a waiting game. Trading cautious in Europe's markets ahead of what many see as the next crunch point: Thursday's meeting of euro zone finance ministers. Baader Bank's Robert Halver says Athens can still play a hand. (SOUNDBITE) (German) CAPITAL MARKET ANALYST FROM BAADER BANK, ROBERT HALVER, SAYING: "There are trump cards and the Greeks still think they have them in their pockets. One trump card is certainly that they can say "if we leave the euro zone, then it is the start of the end of the euro zone.'' And Athens may have few options but to bargain anyway, says JP Morgan strategist Kerry Craig. (SOUNDBITE) (English) KERRY CRAIG, GLOBAL MARKET STRATEGIST, JP MORGAN ASSET MANAGEMENT, SAYING: ''For us the base case is very much that you will see a negotiation, and we do think that perhaps Greece and Syriza will be forced into that by its own population and by the fragility of its banking system, more than anything else.'' Before that, many investors fear capital controls will be imposed. The central bank also confirmed that around 30 billion euros of deposits has been withdrawn from lenders between October and April.

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Greece 'on the brink'?

Wednesday, June 17, 2015 - 01:43