The Greek government has denied that euro zone officials had recommended member countries prepare for Greece's possible departure from the currency bloc.
"The Greek finance ministry categorically denies the reports that it was requested during a Eurogroup telephone conference that euro zone members prepare plans for handling the possible exit of Greece from the euro zone," a government statement said.
The statement referred to media reports that cited a telephone conference of senior officials in Brussels held in preparation for the EU informal summit, at which leaders are due to discuss Greece.
"This kind of article does not correspond to reality but harms the efforts the country is making to deal with its problems," the Greek statement added.
Diplomats in Brussels told AFP today that euro zone countries were examining likely costs and possible complications arising from a potential Greek exit, but said that such planning was normal.
Greece's former prime minister Lucas Papademos said that plans for a Greek euro exit "cannot be excluded," in an interview with Dow Jones Newswires.
Asian and European shares dived and the euro hit a 22-month low today over concerns for Greece.
After an inconclusive vote on May 6, Greece is heading for a second general election on June 17, which is widely seen as a referendum on whether it should stay in the euro.
The radical leftist Syriza party, which wants to tear up Greece's unpopular bailout deal with the European Union and the IMF, came second on May 6 and is expected to emerge in a strong position in the next ballot.
European leaders have warned if the next government reneges on promised reforms that Greece cannot hope to continue drawing international loans, which would likely lead to its exiting the euro zone.
Current developments in Greece 'highly alarming'
The situation in Greece is "highly alarming", but the euro zone and Germany could manage if Athens were to go back on the terms of its bailout, the Bundesbank said today.
"Current developments in Greece are highly alarming," the German central bank wrote in its latest monthly report.
"Greece is threatening not to implement the agreed reforms and consolidation measures in return for extensive aid. This could jeopardise the continuation of the aid and Greece would have to bear the ensuing consequences."
If that scenario were to come about, the challenges for the euro area and Germany would be "substantial, but manageable via careful crisis management," the Bundesbank wrote.
