ATHENS – Going broke and facing 1.5 billion euros in loan repayments while deadlocked in talks with international lenders, speculation has risen again that Greece could be forced out of the Eurozone or new snap elections again as soon as June.
Nine weeks after being elected on an anti-austerity pledge, Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is under fire from European Union critics who said he’s done nothing since to make any progress on reforms needed to unblock a critical 7.2-billion loan he once said he didn’t want but now needs.
Tsipras is walking a tightrope over his campaign promises and the need to satisfy the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that has put up 240 billion euros ($272.5 billion) in two bailouts since 2010 but demanded big pay cuts, tax hikes, slashed pensions and worker firings.
Refusing to pay more than lip service to reforms and presenting only three vague outlines of promises to the troika, the government is running out of cash and could go broke by April 9 although officials insist it will make a 450-million euro payment to the IMF on April 8 and plans to raise 1.4 billion euros in a Treasury Bill sale a deal earlier to pay other investors a week later.
To do that though, the government has stopped paying its bills and obligations, playing for time and more aid amid fears it could fail and bring the country out of the Eurozone and either a referendum on its actions or new elections.
The European Commission was said to have recommended taxpayers in the other 18 Eurozone countries pay Greece’s bills but got shot down after discovering that’s not legal.
Finance Minister Yanis Varoufakis, who had disappeared off the radar screen after his pugnacious style irritated EU leader, was to meet with the head of the IMF, Christine Lagarde, in Washington on April 5 for “an informal discussion on the reform program of the Greek government,” the ministry said.
The troika wants Greece to do at least something before getting more money but Tsipras is clashing with dissidents in the party angry he reneged on campaign promises, chiefly Energy Minister Panagiotis Lafazanis who defied his leader and opposed privatizations.
The former ruling New Democracy Conservatives of then-Premier Antonis Samaras and his coalition partner the PASOK Socialists suffered a bruising defeat on Jan. 25 to SYRIZA, some 2 1/2 years after winning another snap election after a previous PASOK government fell in 2011.
If elections are held in June they would be the fourth in three years as government after government fails to bring the country back into recovery.