'Greece is on the edge of catastrophe. There will be riots and chaos': French central bank boss warns of dire consequences if the country does not make a deal this week 

  • Christian Noyer said he was concerned that major civil unrest could break out if a deal isn't struck by the weekend 
  • He said he fears that Greece descend into 'riots and chaos' if a bailout compromise is not found this week
  • Alexis Tsipras told the European Parliament today that he is confident the end-of-the-week deadline will be met
  • But he claimed that Greece had been used as an 'austerity laboratory' by the rest of Europe over the past five years

The head of France's central bank has warned of the dire consequences facing Greece if it fails to strike a bailout deal this week, adding that he fears the country will descend into 'riots and chaos'.

Warning that the Greek economy 'is on the edge of catastrophe', Christian Noyer said he was concerned that major civil unrest could break out if a deal isn't struck by the weekend.

Speaking at the European Parliament today Greek Prime Minister Alexis Tsipras said he was confident of meeting an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro.

Calling on all sides to work together, Tsipras said: 'This is a European problem which requires a European solution... let us not allow it to become a divided Europe,' he said. He added that Greece, which has imposed tough reforms in exchange for two EU-IMF bailouts since 2010, had been used as an 'austerity laboratory' by the rest of Europe. 

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Tensions are high: People line up at the main gate of the National bank of Greece in central Athens this morning as they wait to withdraw a maximum of €120 euros  for the week

Tensions are high: People line up at the main gate of the National bank of Greece in central Athens this morning as they wait to withdraw a maximum of €120 euros for the week

Concern: Warning that the Greek economy 'is on the edge of catastrophe', Christian Noyer (right) said he fears that civil unrest could break out if Greek Prime Minister Alexis Tsipras doesn't strike a deal by the weekend

Crush: Elderly Greeks push and shove as they argue to be allowed into the bank to withdraw their money

Crush: Elderly Greeks push and shove as they argue to be allowed into the bank to withdraw their money

Despair: A woman holds her head in her hands outside a National Bank of Greece branch in Kallithea

Despair: A woman holds her head in her hands outside a National Bank of Greece branch in Kallithea

A queue of people snakes around the block outside a branch of the National Bank of Greece in Kallithea today

A queue of people snakes around the block outside a branch of the National Bank of Greece in Kallithea today

A pensioner exits a National Bank branch after receiving part of his pension in Athens this morning

A pensioner exits a National Bank branch after receiving part of his pension in Athens this morning

Greece today submitted a request for aid from Europe's bailout fund and is rushing to detail a plan of economic reforms that creditors want to see this week if they are to save the country from financial collapse and keep it in Europe's joint currency.

All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will either rescue Greece's moribund economy, or leave it to crash out of the single currency - a so-called 'Grexit'.

Speaking on French radio this morning, Noyer said: 'The Greek economy is on the edge of catastrophe. A deal absolutely must be found on Sunday because it will be too late after that and the consequences will be serious.'

If a deal isn't struck 'there could be riots... and chaos in the country,' he added.

Greek banks remain closed for a second week, with ATM withdrawals limited to €60 a day. It is believed that creditors may demand that that figure is reduced still further to just $20 as part of the bailout package.

Noyer said it was 'impossible' to re-open the banks while confidence was so low because there would be an 'immediate run' on tellers. 

Speaking at the European Parliament in Strasbourg today, Greek prime minister Alexis Tsipras said his country has submitted a broad proposal to get another rescue plan and will present details in the coming days

Speaking at the European Parliament in Strasbourg today, Greek prime minister Alexis Tsipras said his country has submitted a broad proposal to get another rescue plan and will present details in the coming days

Greek Prime Minister Alexis Tsipras shakes hands with a Member of the European Parliament this morning

Greek Prime Minister Alexis Tsipras shakes hands with a Member of the European Parliament this morning

Greek Prime Minister Alexis Tsipras addresses the European Parliament in Strasbourg today

Greek Prime Minister Alexis Tsipras addresses the European Parliament in Strasbourg today

Members of the European Parliament hold placards which reads "No - Freedom to Greece" ahead of the speech of Greek Prime Minister Alexis Tsipras at the European Parliament in Strasbourg today

Members of the European Parliament hold placards which reads 'No - Freedom to Greece' ahead of the speech of Greek Prime Minister Alexis Tsipras at the European Parliament in Strasbourg today

International affair: Nigel Farage, British Member of the European Parliament and leader of Ukip has an 'Oxi' (No) placard on his desk as he reads through notes this morning

International affair: Nigel Farage, British Member of the European Parliament and leader of Ukip has an 'Oxi' (No) placard on his desk as he reads through notes this morning

ARE SOME GREEKS GOING ON CREDIT CARD SHOPPING SPREES WHILE THEY STILL CAN? 

Greek citizens concerned that their money may soon be worth nothing are going on credit card spending sprees in the hope the items they buy will hold their value. 

Sales of expensive electronic items, such as iPads and PlayStation consoles are understood to have rocketed, despite ATM withdrawal limits held at just €60 a day.

But credit and debit cards can be used as normal, prompting Greeks to  spend the money while they still can.

Natasa, a shop assistant at electronics retailer Plaisio Computer SA in central Athens said: 'People are spending the money they have in the bank because otherwise they're afraid they won't get it out.' 

Speaking to Bloomberg, she added: 'A Mac is something that keeps its value.'

Speaking on BBC Radio 4's today programme this morning, the EU's Economic Affairs Commissioner Pierre Moscovici said: 'The Commission doesn't want the Grexit.'

'Although difficult, an agreement is still possible and more necessary than ever. Grexit would be a terrible failure, a collective mistake and we are fighting to avoid it.'

Asked whether if Greece leaves the eurozone other countries will struggle to keep it together, Moscovici said: 'I'm not talking about that.'

'The Greek government has come with goodwill, the dialogue has started again and we are waiting for a comprehensive, credible set of reforms.'

'When they come we will consider them as we have until Sunday.' 

Tsipras earned both cheers and jeers as he told politicians at the European Parliament that his country is seeking a deal that will mean a definitive end to his country's financial crisis, not just a temporary stop-gap.

Mr Tsipras insisted last Sunday's referendum result, in which voters soundly rejected a previous creditors' reform proposal, does not mean a break with Europe.

He said Greece's proposals, which European officials have said must be finalised and submitted by Thursday, aim to address the country's problems beyond the immediate financing requirements.

'The proposals we have made to our partners are ones that involve credible reforms with an acceptable degree of burden-sharing, which will not bring recessionary effects with it.

'We need to ensure the medium-term funding of our country with a development and growth programme,' Mr Tsipras told the politicians gathered in Strasbourg, France.

Calm: Alexis Tsipras prepares for his speech during the at the European Parliament in Strasbourg today

Calm: Alexis Tsipras prepares for his speech during the at the European Parliament in Strasbourg today

Unlikely: Jean-Claude Juncker, the President of the European Commission, is photographed with an 'Oxi' (No) placard in his hand during the plenary session with Greek Prime Minister Alexis Tsipras this morning

Unlikely: Jean-Claude Juncker, the President of the European Commission, is photographed with an 'Oxi' (No) placard in his hand during the plenary session with Greek Prime Minister Alexis Tsipras this morning

Speaking at the European Parliament today Greek Prime Minister Alexis Tsipras said he was confident of meeting an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro

Speaking at the European Parliament today Greek Prime Minister Alexis Tsipras said he was confident of meeting an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro

Members of the Europe of Freedom and Democracy Group show their support for the Greek Prime Minister

Members of the Europe of Freedom and Democracy Group show their support for the Greek Prime Minister

Support: Members of the Europe of Freedom and Democracy Group show 'no' and 'oxi' placards at their desks during the speech of Greek Prime Minister Alexis Tsipras this morning

Support: Members of the Europe of Freedom and Democracy Group show 'no' and 'oxi' placards at their desks during the speech of Greek Prime Minister Alexis Tsipras this morning

Waiting for money: A queue of people outside a branch of the National Bank of Greece in Athens this morning

Waiting for money: A queue of people outside a branch of the National Bank of Greece in Athens this morning

An elderly woman waits outside a bank in Athens this morning hoping to withdraw up to €120 from her pension

An elderly woman waits outside a bank in Athens this morning hoping to withdraw up to €120 from her pension

Greece this morning submitted a written request for a new support programme from Europe's bailout fund, according to Michel Reijns, the spokesman for the eurozone's top official, Jeroen Dijsselbloem.

Greece needs to back that up by presenting by the end of Thursday a detailed, cost-assessed plan on the economic measures it would take in exchange for loans. So far, Greece has only produced an outline of the measures.

European leaders will hold a summit on Sunday to decide whether the plan is good enough.

Applause rose from leftist quarters when he said aid to Greece only helped out banks, not ordinary Greeks. A few called for compromise.

The head of a conservative group in the Parliament, Belgium's Guy Verhofstadt, said he was 'furious' at Mr Tsipras's failure to spell out specifics of his reform plans.

Ukip leader Nigel Farage told Mr Tsipras: 'Your country ... should have never joined the euro' and urged him to quit the common currency. Britain is not part of the euro.

The political talks come at a time of capital controls in Greece, with the country's banks shut since last week, Greeks limited to withdrawals of 60 euros per day and unable to send money abroad, including the payment of supplies or bills, without special permission.

In his speech to the European Parliament, Mr Tsipras aid Greece's troubles date to long before he took office five months ago

He described Greece as having been used as an 'austerity experiment' for the last five years of bailout reforms imposed on the country that led to spiralling unemployment and poverty, and a contraction of the economy by a quarter.

Calls for peace: A bank worker attempts to control the queue of people outside a branch of the National Bank of Greece in Athens earlier today

Calls for peace: A bank worker attempts to control the queue of people outside a branch of the National Bank of Greece in Athens earlier today

An elderly woman looks concerned as she stands outside a branch of the National Bank of Greece in Athens

An elderly woman looks concerned as she stands outside a branch of the National Bank of Greece in Athens

Patience A queue of people outside a branch of the National Bank of Greece in Kallithea this morning

Patience A queue of people outside a branch of the National Bank of Greece in Kallithea this morning

Bank workers allow several elderly people into a branch of the National Bank of Greece in Athens today

Bank workers allow several elderly people into a branch of the National Bank of Greece in Athens today

Pensioners wait for the opening of a National Bank branch to receive part of their pensions in Athens today

Pensioners wait for the opening of a National Bank branch to receive part of their pensions in Athens today

The experiment with austerity, Tsipras said, had clearly failed.

'We demand an agreement with our neighbours, but one that gives us a sign that we are on a long-lasting basis exiting from the crisis - which will demonstrate to us that there is light at the end of the tunnel. An agreement which will bring about the credible and necessary reforms,' he said.

Mr Tsipras vowed to continue reforms already undertaken.

'But let us not forget that in the last five years, the Greek people have made a tremendous effort for adjustment - a very difficult and hard process of adjustment. This has exhausted the patience and resilience of the Greek people.'

The Greek crisis has frayed the nerves of other European leaders, who have accused the Greek government, elected in January on promises to repeal austerity, of foot-dragging and exacerbating the situation.

Highlighting the rising anger with Mr Tsipras, European Commission president Jean-Claude Juncker had a stark warning for Greece after Tuesday's eurozone summit.

'We have a Grexit scenario, prepared in detail,' he said, apparently referring to the situation in which Greece would be forced out of the currency union.

Greece's eurozone partners have steadfastly said they want to help Greece stay in the currency club but have just as often complained about Greece dragging its feet during months of negotiations.

One big sticking point in the talks is Greece's demand that the terms of its bailout loans be made easier.

European officials are split on the issue, with lead eurozone lender Germany still reluctant. 

Waiting in line: A queue of people outside Alpha bank in the centre of Athens earlier this morning

Waiting in line: A queue of people outside Alpha bank in the centre of Athens earlier this morning

Worries: A Greek man appears deep in thought as he queues outside a bank in central Athens this morning

Worries: A Greek man appears deep in thought as he queues outside a bank in central Athens this morning

People stand in a queue to use the ATMs of a bank in Athens this morning. The maximum withdrawal is still only €60 a week, while pensioners can withdraw up to €120 a week from their pension pots

People stand in a queue to use the ATMs of a bank in Athens this morning. The maximum withdrawal is still only €60 a week, while pensioners can withdraw up to €120 a week from their pension pots

A bank employee tries to calm a group of pensioners down as they wait to be allowed to withdraw their money

A bank employee tries to calm a group of pensioners down as they wait to be allowed to withdraw their money

 
Earlier yesterday Jean-Claude Juncker, one of the men Tsipras negotiated with this evening, dismissed the same referendum as an 'irrelevant circus' saying he couldn't understand what the result meant

Fidel Castro, former leader of Cuba and a committed Socialist, has written to Greek Prime Minister Alexis Tsipras to praise his 'brilliant political victory' in convincing the Greeks to vote no to austerity. Earlier yesterday Jean-Claude Juncker, one of the men Tsipras negotiated with this evening, dismissed the same referendum as an 'irrelevant circus' saying he couldn't understand what the result meant

The International Monetary Fund called last week for European states to accept longer repayment periods and lower interest rates on their loans to Greece. Many economists say that Greece's debt burden, at almost 180% of annual GDP, is unsustainable for a country its size.

Greece has been granted two bailout programmes worth a total of €240 billion euros (£172 billion) in loans from other eurozone countries and the IMF.

But the spending cuts and tax increases demanded as a condition for the loans have hit growth, sending the country into a six-year recession and pushing unemployment to 25%.

As talks broke down between the Eurozone countries and Greece in Brussels last night, European Council president Donald Tusk said: 'I have no doubt that this is the most critical moment in the history of the EU.

'The stark reality is that we only have five days left to find the ultimate agreement.

'Until now I have avoided talking about deadlines, but tonight I have to say it loud and clear that the final deadline ends this week.'

German chancellor Angela Merkel last night also revealed for the first time that leaders have been discussing the possibilities of a parallel currency if Greece falls out of the Euro.

She said the fact that all EU leaders were being summoned to the talks on Sunday showed how urgent the situation was. 

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