Which ‘club’, exactly, remains to be seen… If you’ve been having trouble following the twists and turns and lies and misdirection of the on-going Greek financial crisis [Join the club! – Ed] *ahem* Perhaps some notes on Greece’s Syriza-led Government’s latest
reverse-ferret decision to delay Friday’s €300m (£216m) debt repayment to the International Monetary Fund, and bundle all four of its June payments together in one easy €1.5billion payment by 30 June might help. 30 June, according to the BBC report, is the day on which its bailout deal with the EU and IMF runs out.
From the Guardian live-blog [6.09pm]
Few hrs ago Greek econ minister told me he was certain it wld pay tomo’s IMF repayment. Now we learn they’ll delay payment til end of month
— Ed Conway (@EdConwaySky) June 4, 2015
Although countries are allowed to bundle their IMF repayments together, this is the first time in decades that it’s actually happened.
According to the IMF, Zambia did it in the 1980s, meaning Greece is joining a fairly exclusive club.
— Open Europe (@OpenEurope) June 4, 2015
Big G’s live-blog again [6.42pm]
If Greece can’t or won’t pay tomorrow, can we be confident it will repay the IMF at the end of June?
It all depends on whether Athens can reach a deal with its lenders in time. There are 7.2bn euros of bailout funds waiting to be unfrozen, if an agreement is reached before the bailout programme expires at the end of this month.
But talks between prime minister Tsipras and EC president Juncker last night failed to reach a deal; pensions, labour market reforms and VAT rates are all sticking points (as regular readers know well).
Without compromise, the bailout funds won’t be unlocked in time
If the Greek leader is to call for early elections, he will likely do so on Monday.
But elections would necessarily have to be held in early July – thereby missing the deadline to repay the IMF debts at the end of the month.
The Guardian’s Economic Editor Larry Elliott notes
Athens said it would be bundling together four debt payments due to the IMF into one and would settle up on 30 June.
The move is allowed under IMF rules, but the Washington-based Fund was taken by surprise by the decision, which came just hours after its managing director, Christine Lagarde, said she expected Greece to pay the €300m due on 5 June.
Countries are only supposed to bundle up their debts if they face administrative problems from making multiple payments, but Greece’s decision not to pay on time provides an insight into the country’s desperate financial position.
On the internal Syriza discord,
Greece’s request comes on a day when many in the governing Syriza party have railed against the country’s creditors.
As we reported earlier, deputy social security minister, Dimitris Stratoulis said lenders were pushing a “a disgraceful and dishonourable agreement” on the Greek people.
And that was relatively mild. Alexis Mitropoulos, a deputy parliament speaker and senior official within Syriza told Mega TV that Jean-Claude Juncker had presented a “most vulgar, most murderous, toughest plan.” when he met Alexis Tsipras last night.
Helena Smith in Athens for the Guardian
SKAI News on its flagship news programme tonight is reporting that Christine Lagarde was taken aback by the Greek government’s request for consolidation of its debt repayment.
Why? Because Athens had guaranteed only yesterday that the payment would be made in full, reports Helena Smith in Athens.
“Addressing reporters earlier today, Mrs Lagarde said she did not believe Greece would make such a move because she had been told by officials at the finance ministry than Athens would make the loan installment,” the channel’s Washington-based correspondent Katerina Soko said.
More on one of those exclusive clubs…
Greeks are digesting the news that they are only the second country after Zambia to bundle its IMF repayments.
Some Greek media are reporting that Athens could have found the funds owed to the IMF, but chose not to:
Greece had the money to pay IMF tomorrow, @pitrofos4 reports. Decision not to pay is a political one, gives time to reach deal (if desired)
— Katerina Sokou (@KaterinaSokou) June 4, 2015
And on Greek Prime Minister Alexis Tspiras’ reverse ferret
Just 20 hours ago, Alexis Tsipras was assuring reporters not to worry about Friday’s IMF bill.
We’ve made bigger payments already, he breezily declared, after his talks with Jean-Claude Juncker in Brussels.
This makes the subsequent u-turn all the more surprising, and potentially incendiary.
As Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy, put it to the FT:
“This move is almost unprecedented and based on Tsipras’s comments yesterday unexpected.
It unnecessarily raises the stakes and will further undermine the goodwill of Greece’s creditors.”
Finally, for now, from Helena Smith in Athens for the Guardian
If this is a political move by Tsipras, then it must be designed to pacify his Syriza party.
In particular, the party’s militant faction, which represents around a third of its total MPs and is known as the Left Platform. It says rupture with Europe is now the only option.
Over to Helena Smith in Athens.
The faction wants elections because it believes Syriza would win the polls hand down. Then, one member says:
“We would be in a position to decide what course the country should take.”
Analysts are describing Greece’s plight as “terrifying” – meaning the country’s future is “unforeseeable”.
“The country is in a mess and I don’t know how it is going to get out of it,” the political commentator Alexis Papachelas told SKAI News.
“What is terrifying is that creditors truly believe that what they have offered is very flexible, very tame.”
Clear? [Other club? – Ed] Ah, yes…
club option 2. Greece defaults and leaves the euro…
…Ms Anderson said; “The current economic crisis across Europe undermines democracy by insisting that the only solution is austerity.
“Earlier this year the people of Greece withdrew consent to be governed by the Troika and the discredited political forces of the old regime. They gave their consent to be governed by Syriza on a clear mandate of ending austerity. But the Troika are showing themselves unwilling to accept that choice.
“We have the alternative agenda. We now need the confidence to constantly define push forward [sic] how we will practically implement the necessary changes.
“Our commitment to solidarity does not mean protesting shoulder-to-shoulder [sic agin] with comrades in Greece, Spain, Portugal, France, Britain and elsewhere. It also means we must share the lessons of our struggles. [added emphasis]
Well, let’s hope someone learns something in the time ahead…