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What next for Greece?

"We are not Merkel's colony" banner Image copyright Getty Images
Image caption If Greeks want to escape their current situation some difficult choices lie ahead

It's crunch time for Greece. Again.

A series of deadlines are looming that could trigger the country's exit from the euro - with all the political and financial upheaval that would entail.

Or we may see a political rapprochement, longed-for respite from austerity for the Greeks, and a slow return to economic stability and growth.

What's it to be?

We asked a range of experts for their views on what could, and should, happen next for Greece.

Greece in numbers

€320bn

Greece's debt mountain

€240bn

European bailout

  • 177% country's debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Reuters

Professor Otmar Issing

President, Centre for Financial Studies at Goethe University Frankfurt; former chief economist at the European Central Bank (ECB)

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Image caption Prof Otmar Issing says Europe has done enough for Greece and a line must be drawn

Prof Issing is hawkish on Greece's culpability and the need for Athens to learn to live within its means.

"There is no question that Greece is responsible herself for the mess she is in," he says. "It started with misguided policies even before the start and continued over many years."

Simply writing off Greece's debt would "immediately raise demands by other countries with high debt", he says, and would be especially difficult for the ECB and other debtors to swallow, given that banks and other private investors have already renounced "more than 50% of their claims - the largest debt relief in history."

Europe has done more than enough for Greece and a line must be drawn, he believes, even if this means it has to leave the euro.

While this would show that "the exchange rate regime is not irreversible", it would also "be a strong signal that a member country cannot continue endlessly violating rules and commitments."


Vicky Pryce

Chief economic adviser, Centre for Economics and Business Research; former joint head of the UK's government economic service

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Image caption Greek-born Vicky Pryce thinks it is "ridiculous" for Europe to expect Greece to pay off its debts in its current economic state

Vicky Pryce admits that that the negotiating stance of the Greeks has been "very aggressive", as the recent sidelining of finance minister Yanis Varoufakis in recent negotiations might suggest.

But she believes it is "ridiculous to assume that Greece will ever be able to pay its debt back in current conditions."

In her view, it is unfair to expect more structural reform and austerity "when the economy is collapsing around you. You can't have a country growing again if you've killed all entrepreneurial spirit."

She recommends a rather surprising course of action.

"My view is that the Greeks need to stop this liquidity crisis and promise anything - showing willingness is the most important thing - even if they then do nothing to fulfil those promises."

"The Greeks need to compromise even more, and so does Europe," she concludes.


Anders Borg

Chair, World Economic Forum's Global Financial System Initiative; former minister for finance, Sweden

Image copyright WORLD ECONOMIC FORUM
Image caption Anders Borg thinks the Greek government needs to "get serious"

The Greeks "are wasting time by fooling around - they need to give Europe access to their government data and get serious," says Mr Borg.

Part of the problem has been a lack of mutual trust between European negotiators and the country's new, inexperienced left-wing Syriza government, he believes.

Once Greece shows a willingness to continue reforming - including opening up more of its markets to competition and taxing property more heavily, Europe could soften its demands on Greece in return, he thinks.

If negotiations were to fail, then leaving the euro would be a "meltdown scenario" for Greece, resulting in capital controls on the banks, and even some bank closures, he says. Import prices would "go through the roof" and investment would "fall through the floor".

For the rest of Europe, a Grexit would be less serious, so the onus is on Greece to do more, concludes Mr Borg.

But judging by their behaviour so far "it's not certain that they want to be saved," he says.


Constantinos Michalos

President, Central Union of Greek Chambers of Commerce

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Image caption Constantinos Michalos sees "a warming of relationships" between Greece and Germany

Greece needs a period of stability more than anything else, says Constantinos Michalos.

"Everyone recognises that we cannot possibly endure any more austerity measures," he says. "They have taken their toll on the fabric of Greek society."

But his country needs longer to implement "the reforms we all recognise are necessary". Reforms to national insurance, pensions and labour laws, plus a 15% flat tax rate for the business community would "enhance growth and attract foreign direct investment," he believes.

Mr Michalos remains confident that Greece will remain in the euro if the immediate "liquidity crunch" can be avoided. This will require political agreement between Greek prime minister Alexis Tsipras and German chancellor Angela Merkel.

And there are signs of "an evident warming of relationships", he believes.


The International Monetary Fund and the European Central Bank

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Image caption The IMF's Christine Lagarde has promised to be "flexible" in negotiations with Greece

Its the International Monetary Fund, European Commission, and the European Central Bank who are at the coal-face when it comes to working out the way ahead for Greece. But they mostly keep their cards close to their chest.

Two years ago IMF managing director Christine Lagarde seemed impressed by Greece's efforts to reduce its budget deficit, calling them "exceptional". But she is still keen that the country does more to tackle tax evasion, reduce the size of the public sector and increase competition.

Ms Lagarde has said the IMF is prepared to be "flexible" in its approach, not about the loan interest repayments, but about how Greece goes about reforming its beleaguered economy.

The ECB, which has increased emergency liquidity funding for Greek banks to about €77bn, also thinks the country needs to do more to secure extra funding.

"More work, much more work is needed now and it's urgent," ECB head Mario Draghi said earlier this month. "We all want Greece to succeed. The answer is in the hands of the Greek government."


Deadlines, deadlines...

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Image caption If Greece can't pay its bills will it have to leave the eurozone?
  • 1 May: Greece has to pay €200m of loan interest to the International Monetary Fund (IMF), although it may be given a few days' grace owing to the long bank holiday weekend
  • 8 May: Greece has to roll over €1.4bn worth of maturing 6-month Treasury bills
  • 11 May: Crucial meeting of eurozone finance ministers in Brussels - Greece likely to be high on the agenda
  • 12 May: Greece due to repay €760m of IMF loan
  • 15 May: Greece has to roll over €1.4bn worth of maturing 3-month Treasury bills
  • End of May: the country needs to find about €2.5bn to pay salaries and pensions
  • 30 June: The €240bn bailout agreement between the eurozone and Greece officially expires
  • June and July: €6.7bn due to be repaid to the European Central Bank

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