Greece debt crisis: Ticking time bomb as looming deadline sparks Eurozone jitters

GREECE is racing to have reforms approved in order to unlock a €7.2billion bailout loan before it goes bankrupt and sends the Eurozone into meltdown.

Greek PM Alexis Tsipras 'has a lot of work to do'AP Photo/Yorgos Karahalis

Greek PM Alexis Tsipras 'has a lot of work to do'

The cash-strapped country is set to miss a deadline of this week to have the conditions given the go ahead by EU creditors.

It's now thought to be only a matter of days before it runs out of the money it needs to keep the country afloat.

Although noone is sure exactly when cash reserves will run dry, the country is expected to default on its next payment to the International Monetary Fund (IMF), due by 11 May, if a loan isn't approved.  The IMF has previously stated that it would not consider a 'repayment holiday' for the state.

The result of the default is expected to have a severe knock on effect on global financial markets. European stock markets posted their heaviest losses this year last week, as a result of rising fears that Greek is set to default.

"With EU and ECB officials no longer afraid to openly discuss the ramifications and consequences of a Greek default, and prospect of a deal at this week’s EU finance ministers meeting, disappearing off into the distance, the odds are rising that we could well see a Greece default sometime in the next few weeks," said Michael Hewson, analyst at CMC Markets.

Greek Prime Minister Alexis Tsipras wants a pause on the austerity that has been imposed on the country, as a condition of bailout cash.

Last week he said that there are four sticking points about what Greece should do in return for the money, regarding labour relations, the country's social security system, VAT increases and the development of state property.

He added that he believed an agreement will be reached. He said: "I am convinced that Europe of democratic traditions and the Enlightenment will not give in to the extreme voices of some, will not choose the path of an unethical and brutal financial blackmail, but the path of bridging differences, the path of stability and mutual respect, and above all the path to democracy, for the benefit of our common European future.”

But over the weekend, the head of the European Central Bank, Mario Draghi said that "the answer is in the hands of the Greek government" and that it urgently needed to do "much more work" to provide a plan of action that will be agreed.

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