Greece's 'fantasy politics' ringing alarm bells
U.K. Labour Party politician and contender for the leadership of the party, Liz Kendall, has attacked the Greek government, which has so far failed to reach a compromise with creditors, comparing their methods to "fantasy".

Kendall, who is up against three other Labour politicians in a fight to win leadership of the party, which suffered a bruising defeat in the U.K. general election, said the situation with Greece posed a "historic moment for Europe". Read MoreUK slashes welfare spending, corporation tax in budget

Greek Prime Minister Alexis Tsipras is seen on a television monitor while addressing the nation in Athens, Greece July 1, 2015. ERT | Pool | Reuters

"Progressive social democratic parties have to find a credible alternative to the ever-continuing austerity which sees people suffer and the fantasy politics of (Greece's) Syriza and (Spain's) Podemos on the other. And that is just as much a challenge I believe for the U.K. Labour Party as it is for our sister parties right across Europe," Kendall said at a CNBC event in London. Kendall warned that without a deal, Greece ran the risk of plunging further into economics crisis due to "extremism" and that a potential partnership with Russia was also cause for concern. Read MoreGreek 'concrete' proposals: Tax hikes and pension reforms? "We have Russia waiting in the wings. If support can't be found for Greece, I have no doubt that Russia may be keen to step in in exchange for who knows what," she said.



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