European officials pile pressure on Greece

TALLINN, Estonia -- European officials piled pressure on Greece on Saturday to stand by its fiscal commitments or face leaving the eurozone, as political turmoil in the country has cast doubt on whether it will abide by the terms of its latest €130 billion ($168 billion) bailout.

"Of course, the ball is now in the Greek court and the hands of the Greek people," the European Union's Economic and Monetary Affairs Commissioner, Olli Rehn, said during a debate in Tallinn, Estonia.

Greece faces a "very clear" choice on whether or not to abide by the commitments it has made to its 16 eurozone peers, Rehn warned. "It would be much better if Greece finds a way to take the necessary decisions to stay in the euro," he said.

Under the terms of the country's latest €130 billion bailout, Greece must detail some €11.5 billion worth of spending cuts in 2013 and 2014 to close a budget gap expected to reach 7.3 percent of GDP this year.

However, the country remains in political deadlock following elections Sunday that handed swathes of seats to anti-austerity parties and left mainstream parties without a majority.

The left-wing Syriza party, which campaigned against any bailout plan that requires deep spending cuts, saw its support triple and emerged in second place.

Speaking on the same panel as Rehn on Saturday, Irish central bank governor Patrick Honohan said a Greek eurozone exit would not necessarily be "fatal" for the currency bloc and could "technically" be managed.

"It's not imagined in the legislation, but things have happened that aren't imagined in the treaties," said Honohan, who also sits on the European Central Bank's governing council.

Greece would not "ipso facto" be forced out of the currency bloc if it rejects the terms of its rescue package, but such a rejection would have "huge consequences," Honohan added.

Meanwhile, Jens Weidmann, head of Germany's Bundesbank and an influential member of the ECB's governing council, warned that Greece risks losing any future financial aid if it does not hold to the bailout agreement.

"If Athens doesn't stick to its word, that's a democratic decision," Weidmann told German newspaper Sueddeutsche Zeitung in an interview published Saturday. "But the result is there's no more basis for financial support."

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