Head of EU Stabilization Fund Warns of Greece’s Bankruptcy Threat

The head of the European Stability Mechanism (ESM), Klaus Regling, warned of the threat of Greece’s bankruptcy, if the parties – Greece and its creditors — will not decide on a new Greek debt agreement in time.

"Time is running out," Regling told the ‘Bild’ newspaper, adding that the parties are working on a common agreement day and night.

If the agreement is not reached in time, Greece would not be able to borrow any money from creditors and is likely to face "national bankruptcy," Regling said. However, he added, if Greece and European creditors come to terms with each other and agree on a binding reform list, Athens will be able to "relatively quickly" get new loans.

For several weeks, the Greek government has been negotiating with the European Central Bank, the EU and the International Monetary Fund a possibility to receive the last tranche of 7.2 billion euros from the current loan program. The donors require from Athens further economic reforms, increasingly exerting pressure on the country.

German Chancellor Angela Merkel previously recalled that, according to the agreement reached in February, the new reform program should be presented before the end of May as the extension period of the loan program ends at the end of June.