The current situation in Greece is extremely worrying, Germany's Bundesbank said in its monthly report on Wednesday. It is threatening not to implement agreed reforms and jeopardizing the continuation of financial aid, the central bank said.
Greece would have to bear the consequences of such a decision. Euro area will face significant challenge if Greece exit from the region. But it would be manageable with the help of cautious crisis management, the bank added.
Further, Bundesbank said dilution of bailout terms could undermine the trust in efforts taken not only Greece but also in other nations that are undergoing deficit problems.