UK Chancellor: 'Crunch-time' for Greece and Eurozone

- George Osborne warns Britain will suffer if Greek bailout deal fails.

BRUSSELS (AA) - U.K. Chancellor George Osborne has warned Britain and Europe’s economic stability will be shaken if a deal cannot be reached on Greece’s bailout.

Speaking ahead of a meeting of European finance ministers in Brussels on Tuesday, Osborne said the consequences of a Greek exit from the Eurozone would be chaotic.

He told reporters: "We are reaching crunch time for Greece and the Eurozone, and I’m here to urge all sides to reach an agreement, because the consequence of not having an agreement would be very severe for economic and financial stability.

"What Britain really needs to see is competence not chaos."

European creditors have handed Greece an ultimatum, to agree by Friday to continue with the €240 billion ($260 billion) bailout program - which has imposed harsh conditions on the country - or face a default.

- Default risk

But Greek government officials are continuing to defy the Euro group of 19 nations.

Finance Minister Yanis Varoufakis announced after meeting with his counterparts in Brussels: "In the history of the European Union, nothing good has ever come out of ultimatums."

"I have no doubt that in the next few days any notion of an ultimatum is going to be withdrawn." 

The European part of Greece's bailout program is to expire on Feb. 28, raising the risk that the country could default on loan repayments and become the first member of the euro currency union to leave it.

Greek banks are set to run out of euros in any event, if they do not receive funding from the European Central Bank within a very short period. 

A report from JP Morgan Chase released on Monday showed that Greek banks were losing deposits at the rate of €2 billion ($2.27 billion) a week.

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