Greece battles to beat bankruptcy

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Greece battles to beat bankruptcy

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As the Greek government struggles to get its finances under control rumours persist that the country is on the brink of bankruptcy.

The German finance ministry has charged a team of economists to look into the potential harm Greek default could do to the euro zone.

It is a scenario Greek Prime Minister George Papandreou wants to avoid at all costs:

“We made a decision to wage a battle in order to avoid a catastrophe, a catastrophic bankruptcy for the country and its people, to stay in the euro, and this means difficult decisions, difficult sacrifices.”

If Greece fails to implement austerity reforms then new rules will need to be drawn up, which could lead to the country leaving the euro.

Financial analyst Nikos Christodoulou fears such a drastic move: “Greek companies that buy raw materials in euros, dollars or other currencies will face serious cost problems if we have a constant drachma depreciation. Therefore at this moment Greece’s exit from the euro zone would be a nightmare scenario.”

As politicians and bankers discuss the country’s fate, public anger continues to erupt on the streets.

Overnight police arrested 100 demonstrators in the city of Thessaloniki.