Greece moved closer to a perilous bankruptcy Saturday after talks over a bailout package broke down with its creditors, who rejected any emergency extension of the aid that has kept the debt-ridden Mediterranean nation afloat.
The other 18 nations that share the euro with Greece said they would not grant a grace period or await the outcome of a snap referendum the Greek government plans to hold next weekend on the bailout proposals on offer from international lenders. Without a deal in hand, Athens is expected to run out of money by Tuesday and default on a payment it owes the
Such a default could throw the Greek economy into chaos, shut down the country's banks and threaten its membership in the Eurozone. The ill effects could spread to neighboring nations and even the global economy.
European officials blamed Greece's left-wing government for "unilaterally" breaking off negotiations by announcing early Saturday its surprise intention to conduct a referendum on the creditors' proposals — and to actively campaign against their approval.
“The process wasn’t finished, as far as we were concerned. The proposals weren’t definitive. They weren’t formally discussed or decided upon,” said Jeroen Dijsselbloem, the leader of the Eurozone’s finance ministers. “That is a sad decision for Greece, because it has closed the door on further talks where the door was still open in my mind.”
But Greek officials accused their creditors of backing them into a corner and refusing to budge on a bailout formula prescribing more of the same austerity that has made the Greek economy contract by 25% in the last five years.
Early Sunday, the Greek parliament, led by Prime Minister