Painful exit on cards for Greece

Athens 

 The Greek central bank warned for the first time yesterday that the country could suffer a "painful" exit from the eurozone and even the EU if it fails to reach a bailout deal with international creditors.

The warning came as negotiations over the release of the last 7.2 billion euros ($8.1bn) in rescue funds from Greece's massive international bailout are deadlocked, with payment deadlines looming.

All eyes are on a meeting of the 19 eurozone countries to take place Thursday in Luxembourg.

Fanning the flames, Greek Prime Minister Alexis Tsipras warned yesterday that an EU "fixation" on pension cuts would scupper any hopes of reaching an agreement to avert a catastrophic default.

"There is no room for further cuts without affecting the core of the (pension) system," Tsipras said after meeting with visiting Austrian Chancellor Werner Feymann, one of the few European leaders supporting Greece in the talks.

"This insistence on cutting pensions is incomprehensible," the Greek premier said. "If Europe insists on this incomprehensible fixation ... it must accept the cost of a development that will benefit no one in Europe."

In one of the starkest warnings so far from a Greek institution, the Bank of Greece said failure to reach an agreement would" mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and -– most likely -– from the European Union."

The central bank also said Greek bank deposits had fallen by nearly 30 billion euros between December and April, to 128 billion euros.