International Tension Rises over Greece and its Debts

Neither side wants to blink first. But the stakes could hardly be higher.

If Greece and its lenders can't agree terms for the release of more bailout cash soon, said the country's central bank today, it risks a "painful" exit from both the euro and the European Union. It's the first time the Bank of Greece has issued such a warning.

People on the streets of Athens voiced concern to the BBC that a so-called Grexit could now be the next step. And time is fast running out for Athens and its lenders to do a deal, before a €1.6bn repayment to the International Monetary Fund falls due at the end of this month.

If Greece does leave the euro, it could devastate the value of peoples' savings.

That helps explain why - according to the Greek central bank today - around 30 billion euros of bank deposits were withdrawn between October and April.

We asked the Greek economist Elias Papaioannou, who's in Athens, what the mood is like there.