Federal Bank of Germany

Time is running out for Greece to reach a deal on its debts with its eurozone backers, the president of Germany's Bundesbank warned on Monday, urging Athens to act to avoid a default that could tip it out of the eurozone.

The risk of Greece becoming insolvent is "increasing by the day," the head of the German central bank or Bundesbank, Jens Weidmann, said on Thursday.

The situation in Greece is critical but the direct danger to European banks is relatively small, a senior official at Germany's Bundesbank told a newspaper on Monday.

May 18 Greece's government should stick to earlier commitments and present reform proposals to help avoid the country becoming insolvent, Germany's central bank warned on Monday.

In its monthly report, written by economists and officials at the bank, the Bundesbank used unusually frank language to describe what it called the «worrying» situation in Greece.

Additional Eurozone assistance to indebted Greece is dependent on Athens improving the state of its finances, German central bank executive Andreas Dombret said in Johannesburg on Friday.

Additional debt relief will not help pull Greece out its current crisis, the head of the German central bank or Bundesbank, Jens Weidmann, said on Thursday.

The victory of leftist SYRIZA party in the early parliamentary elections held in Greece have left European leaders divided in their assessment, with many fearing this could have negative repercussions in their own countries.

British Prime Minister David Cameron wrote on Twitter that "the Greek election will increase economic uncertainty across Europe."

A Turkish community leader in Germany warned Dec. 28 against proposals by mainstream politicians for "dialogue" with a far-right populist movement that has drawn thousands to anti-Islamic street protests.
      

The German central bank on Dec. 5 downgraded its growth forecasts for the German economy, Europe's biggest, for 2014, 2015 and 2016.        

The Bundesbank said in a statement it is penciling in growth of 1.4 percent for 2014, 1.0 percent for 2015 and 1.6 percent for 2016.