ECONOMY

National Bank chief: Failure to reach deal would be ‘insane’

The head of Greece’s biggest bank voiced optimism on Sunday that the country would avoid a default, saying it would be «insane» if there was no deal with creditors.

The clock is ticking for Athens to reach a deal with the European Union and the International Monetary Fund, with a key debt repayment due at the end of the month.

But Louka Katseli, chair of the National Bank of Greece, told BBC radio on the eve of a eurozone summit on the crisis that she did not think there would be a default.

“I think sanity will prevail and an agreement will be made because I really cannot see any reason why our partners and creditors of the Greek government cannot forge an agreement,» she said.

“To enter into such unchartered waters and take up all the risk both for the eurozone and for Greece for two or three billion difference, I think it’s insane.”

Katseli, a former socialist economy minister who later supported ruling radical leftist party SYRIZA, predicted there would be no government default within the eurozone because the cost would be «really serious».

“If it is perceived by markets that the decision to enter the eurozone is not irrevocable but for a couple of billions you can revoke it and a government can be declared insolvent, then there will be a speculative attack against the next weak participant in the eurozone or against the euro,» she predicted.

If no deal is reached, Greece looks likely to default on an IMF debt payment of some 1.5 billion euros due on June 30, risking an exit from the eurozone.

[AFP]