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Bundesbank's Greece worries

May 18, 2015

Germany's central bank has expressed its dissatisfaction with the reform process in Greece. In its latest monthly report, it said Athens would not be able to avoid bankruptcy without changing its course in negotiations.

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Greek flag, euro banknotes
Image: picture alliance/chromorange/Ohde

Greece needed to fundamentally change its attitude in the current negotiations with its creditors, the German central bank warned in its latest monthly report on Monday.

The Bundesbank maintained the bailout program expiring in June could not be continued under the current conditions, adding that the southern eurozone country's financial solvency was extremely jeopardized.

The lender said a sustainable solution to the financial crisis was only possible, if Greece implemented substantial reforms.

ELA to the rescue

"Greece is called upon to finally come up with appropriate reform proposals, stick to already agreed measures and do its bit to avoid insolvency," the Bundesbank said in its report.

It pointed out that Greece had only been able to stay afloat, because the state and Greek lenders kept receiving Emergency Liquidity Assistance (ELA) provided by the country's central bank.

The far-left government in Greece and the nation's creditors have been negotiating for months to hammer out a deal that would enable Athens to receive more bailout funds. But talks have so far been unsuccessful, with the two sides accusing each other of insufficient flexibility.

hg/sri (dpa, Reuters)