UK chancellor warns of Greek debt crisis fallout

Britain’s Chancellor of the Exchequer George Osborne has warned that the threat of a "very bad outcome" for Greece and the eurozone is rising.

"It’s clear that the risk to the world economy, the risk to the British economy of this standoff between the eurozone and Greece, is growing each day," said Osborne during an in interview with Bloomberg Television in the Turkish city of Istanbul on Tuesday.

There is growing danger that the deadlock over Greece’s bailout program could spin out of control, he added.

“The risks of a miscalculation or a misstep leading to a very bad outcome are growing as well,” the chancellor added.

Osborne was in Istanbul to attend the G20 finance ministers and central bankers meeting.

Osborne’s comments followed an emergency meeting on Monday held by British Prime Minster David Cameron with senior Treasury and Bank of England officials to discuss plans to prepare the UK for a Greek eurozone exit.

"We need to be prepared to deal with uncertainties in financial markets,” said Cameron’s official spokesman.

EU skepticism

In an attempt to bridge differences with Greece, Commission President Jean-Claude Juncker contacted Greece's newly elected Prime Minister Alexis Tsipras via telephone on Tuesday.

Even though Juncker said the conversation took place in a "positive spirit of cooperation," a Commission spokeswoman dismissed media reports of a final deal on Greece’s bailout terms this week.

"There is no Juncker plan at this stage, of no matter how many points, there is no such plan at this stage," Commission spokeswoman Mina Andreeva told reporters in Brussels on Tuesday.

"That being said, of course very intense contacts are going on between the president, Prime Minister Tsipras and other players involved in the eurozone and beyond, but up to this point all these contacts have not been very fruitful,” she added.

On Monday, Juncker advised the Greek government not to presume that the Eurozone would simply accept their new premier’s promises about dropping economic reforms.

He added that the Greek prime minster "only partly addressed" the EU’s concerns in his speech in Athens.

Greece seeks non-EU financing

Greek Defense Minister Panos Kammenos has said his country could seek assistance from other parties if the EU “remains rigid” and fails to show flexibility in reaching a new debt agreement with Athens

“What we want is a deal. But if there is no deal -- hopefully (there will be) -- and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source,” Panos Kammenos told Greek television on an overnight show that ran into early Tuesday.

Kammenos added that his country could turn to the United State, Russia, China or other states for assistance should Europeans let Athens down.

Prime minster speech

In his first policy address to parliament on Sunday, the new Greek prime minister said the country cannot ask for an “extension of mistakes,” beyond February 28 when bailout loan by international creditors is slated to end, adding that "the bailout failed."

Tsipras further stated that within the next 15 days Greece is considering a “bridge” agreement with European partners that asks for permission to issue additional short-term debt while it seeks a new deal.

In 2010, Greece enforced severe budget cuts in return for a 240-billion-euro (USD 270-billion) bailout from the troika of lenders -- the European Commission, the International Monetary Fund and the European Central Bank.

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