Merkel warns Athens on rescue terms

Angela Merkel has warned Greece it cannot renegotiate its bailout as the nation prepares to vote in tomorrow’s crunch elections that threaten the future of the eurozone.

Angela Merkel has warned Greece it cannot renegotiate its bailout as the nation prepares to vote in tomorrow’s crunch elections that threaten the future of the eurozone.

Athens will not be allowed to dodge its austerity agreement and “lead everyone else through the arena by the nose ring,” the German Chancellor said.

European leaders fear the poll, a re-run of a vote held six weeks ago that failed to return a government, could see Greece crash out of the single currency if anti-austerity party Syriza wins.

Unofficial polls put it level with the conservative New Democracy Party, which has told voters they face a choice between keeping the euro and returning to the drachma.

Chancellor Merkel and other key EU figures pledged to take the “necessary action” needed to secure global economic stability in a video conference call setting the groundwork to next week’s G20 meeting of leading economies in Mexico.

The Greek poll is viewed as such a potential flashpoint in the eurozone’s future, the German Chancellor, French President Francois Hollande and Italian premier Mario Monti are expected to delay their travel to Los Cabos until Monday to be in place to deal with the immediate aftermath of the results.

Mrs Merkel said: “We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the euro zone would be in danger.”

Central banks, including the Bank of England, Bank of Japan and US Federal Reserve, are expected to launch emergency support measures to cushion the blow of an implosion in the eurozone.

Analysts have wanred that a Greek exit from the eurozone was becoming more likely regardless of the outcome of the tomorrow’s poll.

That would trigger a deep and long recession in the eurozone and possibly beyond, experts predict.

It would fuel a run on the banks with Greeks likely to want to avoid having their euros converted to drachma or their savings frozen.

The same could happen to banks in countries which have lent heavily to Greece, such as France, triggering a domino effect known as contagion, which could also spread to banks in non-eurozone countries.

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