Thursday, June 18, 2015

Greek Central Bank Issues Dire Warning on Bailout Talks

by Stelios Bouras & Brian Blackstone

Wall Street Journal

June 17, 2015

Greece’s central bank, in unusually stark language that angered the ruling party, warned Wednesday that failure to clinch a deal with international creditors on desperately needed funding could “snowball into an uncontrollable crisis” for the country.

The left-wing party Syriza responded by accusing the central bank of overstepping its role and undermining the government’s negotiating position. The standoff between Athens and its lenders has become politically charged, with each side deeply mistrustful of the other and neither showing signs of giving ground.

The European Central Bank—which includes the Bank of Greece as a member—is facing increasingly tough decisions as the threat of default grows, underlining how even institutions that strive to remain above politics are being drawn into the fray.

“They’re under pressure from a lot of sides,” said Jacob Funk Kirkegaard, senior fellow at the Peterson Institute for International Economics.


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