ECB President Mario Draghi warns Greek bailout deal is "urgent"

Jessica Morris
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European Central Bank (ECB) president Mario Draghi has warned the negotiations around Greece's €240bn (£181bn) bailout program are "urgent" and a default by the cash-strapped country would push the region into "uncharted territory".

"Much more work is needed now, and it's urgent," he said at the International Monetary Fund - World Bank spring meeting in Washington.

"We all want Greece to succeed. The answer is in the hands of the Greek government." This echoes comments made earlier this week when he stressed that the ball remains in Greece's court.

Prime Minister Alexis Tsipra's government is trying to come up with a list of economic reforms acceptable to its creditors, in order to unlock a €7.2bn tranche of cash.

But the clock is ticking - it's due to pay €200m to the IMF on 1 May and then €770m on 12 May - and could face a choice between repaying these or salaries and pensions.

The Greek government has previously agreed to continue fiscal austerity, it does want to reduce the extent of it.

Draghi said, compared to the start of the sovereign debt crisis around five years ago, the euro area is better prepared for the financial turmoil that could ensue if the negotiations failed.

Commentators have warned that if Greece is unable to secure funding, it could lead to capital controls - which would stop panicked investors pulling money out of the country - as well as an exit from the common currency.

Nonetheless, he said it's still facing "uncharted territory".

Investor nervousness pushed Greek 10-yield bond yields higher this week, signalling increased sentiment that the debt-laden country would default.

Friday's spike had followed a report that the IMF had "persuaded" the Greek government not to make an official request to delay its repayments.

This came against a backdrop of an increasingly gloomy for Greece.

The credit ratings agency Standard & Poor's cut its long-term credit rating to CCC+.

And German finance minister Wolfgang Schaeuble has said another debt restructuring is unlikely, and demands for war repatriations from Germany are "completely unrealistic".

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