Greece: Clinch Bailout or Face Euro Exit

http://www.cnbc.com/id/45854573/

Greece will have to leave the euro zone if it fails to clinch a deal on a second, 130 billion euro bailout with its international lenders, a government spokesman said on Tuesday.

It was an unusually public stark warning from the embattled country, aimed at shoring up domestic support for tough measures and possibly also at the lenders themselves.

"The bailout agreement needs to be signed otherwise we will be out of the markets, out of the euro," spokesman Pantelis Kapsis told Skai TV. "The situation will be much worse."

Greece is racing against the clock to agree with the EU, the IMF [cnbc explains] and private bondholders on the details of the rescue plan before a major bond redemption in March. It risks a default if there is no deal by this date.

Athens and its EU partners have repeatedly ruled out a euro exit, which could drag the bloc even deeper into crisis, and usually avoid saying this is a possible scenario.

But top Greek officials, who need to push through unpopular reforms to clinch the bailout deal, have warned over the past few days that a return to the drachma would be "hell" and that the country must stick to austerity to avoid it.

EU, IMF and ECB inspectors are expected in Athens mid-January to flesh out the new bailout plan agreed in principle by EU leaders in October to avoid a Greek default and a euro exit.