Greece is negotiating to unlock some 7.2 billion euros in bailout cash with creditors -- the IMF, the European Union and the European Central Bank© AFP/File Louisa GouliamakiGreece is negotiating to unlock some 7.2 billion euros in bailout cash with creditors -- the IMF, the European Union and the European Central Bank
Dresden (Germany) (AFP) - Greece's fate in the euro area continued to cast a shadow over the second and final day of a Group of Seven finance ministers meeting in Dresden Friday with still no sign of a deal in sight.
The governor of the Bank of Japan Haruhiko Kuroda -- who is attending the meeting -- warned of the consequences of a possible "Grexit" or Greek exit from the euro.
"If for the first time a country leaves the eurozone, then it won't be the same stable monetary union as before," Kuroda told the business daily Handelsblatt.
In fact, the euro area would then simply resemble a system of fixed exchange rates and such systems had never proven particularly successful in the past, the central bank chief said.
Nevertheless, Kuroda said he did not believe there would be any contagion effects "in the short term if Greece defaults or even leaves monetary union."
That would "manageable," he said.
While Greece is not officially on the agenda of the Dresden meeting -- which is preparing for a wider summit of G7 leaders starting on June 7 -- the issue was at the top of everyone's minds.
Haruhiko KurodaREUTERS/Toru Hanai Haruhiko Kuroda

Potential 'Grexit' 

International Monetary Fund chief Christine Lagarde caused a flurry when she said in a newspaper interview on the sidelines of the meeting that a Grexit scenario was "a potential."
But the IMF subsequently scrambled to clarify her comments by saying Lagarde hoped it was a scenario "the Europeans will not have to face because hopefully they will find a path to agree with the future of Greece within the eurozone."
Athens' coffers are empty and the Greek government under Prime Minister Alexis Tsipras has said it has "no money" to make a series of repayments to the IMF that are due beginning June 5, totalling 1.6 billion euros ($1.75 billion).
Athens is negotiating to unlock some 7.2 billion euros in bailout cash with creditors -- the IMF, the European Union and the European Central Bank.
While Greece is hopeful it could reach a deal by Sunday, its creditors are more sceptical.
The EU Commissioner for Economic and Monetary Affairs, Pierre Moscovici, said on Thursday that a deal was "possible" but a great deal of work still needed to be done.
Greek Finance Minister Yanis Varoufakis told radio station VimaFM in Athens on Friday that a deal was close.
"We are close to concluding the negotiations, there will be an agreement soon," he said, adding there was a consensus "on the majority of questions."
Yanis VaroufakisAPGreek Finance Minister Yanis Varoufakis speaks at the Informal Meeting of Ministers for Economic and Financial Affairs of the European Union in Riga, Latvia on Friday, April 24, 2015.

Range of topics

The official topics on the agenda of the Dresden meeting range from the state of the global economy, to financial regulation, fighting tax evasion and ways of starving jihadist groups like the Islamic State of funding.
On Thursday, there was a "great deal of discussion" about the current weakness of global growth and how that should be redressed, participants said.
Ahead of the final news conference on Friday afternoon, there were to be working sessions on other issues such as Ukraine and its financial situation, or possible aid to Nepal in the wake of the catastrophic earthquake there.
Another possible topic could also be Britain's future within the EU as the re-elected conservative government under David Cameron will hold a referendum on the matter by 2017.
Cameron is currently on a whistlestop tour in Europe and met Poland's premier in Warsaw Friday before heading to to Berlin later in the day to meet German Chancellor Angela Merkel.
The Chinese currency, the yuan or renminbi, could also feature in discussions, as Beijing continues to push for it to play a greater role in the world financial system, such as being included in the basket that makes up the IMF's own "special drawing rights" reserve currency.

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