The Bank of Greece has warned that failure to reach an agreement with the institutions will result in a default, while the country will then be forced out of the euro and – most likely – the European Union. The warning came in the form of the Bank of Greece’s Monetary Policy report for 2014-2015, which stressed the need to reach an agreement.
Furthermore, the report notes that “a manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring”.
“All this mean a deep recession, dramatic reduction of income, proliferation of unemployment and the collapse of everything which the Greek economy has been achieved since joining the EU, particularly during the euro period. From an equal partner of core European countries, Greece will become a poor country in Southern Europe” it added.
The full Monetary Policy 2014-2015 report (in Greek)
