Germans prepare for Greek bankruptcy

The German government is weighing what to do if the Greek state goes bankrupt, the daily Bild reported on Friday.

Citing several individuals familiar with the matter, the paper said German authorities were holding “concrete consultations”, including about introducing capital controls in Greece if it goes bust, the paper said.

Bild said a debt haircut for Greece was also being discussed and that German government officials were in close contact with the European Central Bank.

Germany, however, did not have a concrete plan on how it would react if Greece goes bankrupt, Bild said, adding much would have to be decided on an ad-hoc basis.

The report comes after the International Monetary Fund (IMF) dramatically abandoned Greece debt talks in Brussels on Thursday, citing major disagreements.

Disputes broke out mid-negotiations for a cash-for-reform deal, causing the IMF’s delegation to fly home to Washington. Greece’s entire delegation followed suit and left for home.

The European Union also accused Greek Prime Minister Alexis Tsipras of gambling with his cash-strapped country’s future as it pushed him to make crucial decisions in order to avert a devastating default.

Lenders are twisting Greece’s arm on a deal to unlock funds before the end of the month or have Athens default on an over $2.3 billion repayment to the IMF.

A default risks pushing Greece out of the eurozone and plunging the European economy and financial markets to turmoil with unpredictable consequences.

Four months of bitter negotiations with Greece’s anti-austerity government now seem totally deadlocked.

German Bundesbank President Jens Weidmann and EU Economics Commissioner Pierre Moscovici warned time was running out to avert a Greek state bankruptcy and possible exit from the eurozone.

Tsipras held two hours of talks with European Commission President Jean-Claude Juncker which EU officials described as a “last attempt” to reach a deal but neither side reported any breakthrough.

Meanwhile, hundreds of anti-bailout protesters gathered in a square in Athens to urge the Greek prime minister not to give ground.