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Greece on the Grexit

The Telegraph has reported that Greece is on the brink of economic meltdown, after Germany poised to push the country out of the Eurozone.

With the embattled country set to default on a €1.5 billion (£1.1 billion) debt repayment, senior German politicians have warned that “enough is enough.”[1]

If Greece continues to fail to come to a deal with Eurozone partners and secure the final tranche of its bail out, there is a real chance it could default on its loans. This could push the Greek government towards leaving the single currency, otherwise known as a Grexit.

Global oil process fell after negotiations collapsed after just 45 minutes on Sunday amid fears that Greece is now heading towards financial catastrophe. It has emerged that the Chancellor will hold an emergency meeting as ministers seek to protect Britain’s economy from the potential Grexit.

Alexis Tsipras, the Greek Prime Minister, has been accused of attempting to “swindle the whole world” following a series of demands made in recent days, according to the Telegraph. The Guardian has reported that Tsipras firmly believes that Europe needs Greece as much as Greece needs Europe, marking a misapprehension of his bargaining power.

The Guardian has further reported that the most likely outcome is for Tsipras to eat his words and submit to the conditions set by the “Troika” (the European commission, European Central Bank, and the International Monetary Fund) before the end of June. If not, the ECB will stop supporting the Greek banking system, and the government will run out of money to service foreign debts and, more dramatically, to pay Greek citizens their pensions and wages[2].

[1] “Grexit beckons: Greece on brink of euro exit as it faces economic meltdown” http://www.telegraph.co.uk/news/politics/
[2] Anatole Kaletsky, “Greek crisis: Europe has nothing to fear from Syriza’s belligerence”, www.the guardian.com