The failure of Greece’s ruling Radical Left SYRIZA party to make a deal with international lenders has split it asunder at the same time, world press reports say.
The Heat is on Greece’s Alexis Tsipras
The New York Times – Niki Kitsantonis
With Greece in the final stretch of negotiations with its creditors, aimed at unlocking rescue loans the country needs to avert an imminent default, Prime Minister Alexis Tsipras faces growing pressure from the ranks of his own party.
After weeks of simmering dissent among the more radical elements of his leftist Syriza party, Mr. Tsipras on Sunday faced his biggest challenge from within the party since taking office in January.
A faction known as the Left Platform proposed that Greece stop paying its creditors if they continue with “blackmailing tactics” and instead seek “an alternative plan” for the debt-racked country.
The proposal came as the interior minister, Nikos Voutsis, told Greek television that Athens would not be able to make debt repayments of 1.6 billion euros, or nearly $1.8 billion, that are due next month to the International Monetary Fund, one of Greece’s three international creditors.
“The money won’t be given,” Mr. Voutsis said. “It isn’t there to be given.”
The proposal by the Left Platform, which is led by Panagiotis Lafazanis, the energy minister, and represents around 30 of Syriza’s 149 representatives in the Greek Parliament, was rejected by the party’s central committee late Sunday by a vote of 95 to 75.
That Mr. Tsipras’s more moderate stance prevailed represented a small victory for the prime minister. But the strong support for the Left Platform’s proposal indicates that Mr. Tsipras faces a difficult balancing act as he tries to seal a deal with creditors and bring it to Parliament.
Syriza came to power on a promise to take a hard line with creditors in debt negotiations and resist the type of austerity measures that are blamed for driving up unemployment to 25 percent and slashing household incomes by a third. …
Mr. Lafazanis, the Left Platform leader, suggested that the impact of Greece’s exit from the eurozone could be manageable.
“Who says an exit from the euro and return to the national currency would be catastrophic?” he said, adding that the government should start preparing Greeks for the possibility of an “alternative solution” to avert the imposition of new austerity measures and privatization of government assets.
Greece Could Default to IMF, Euro Could Crash
The Daily Mail – Gerri Peev
Greece could default on its £1.1billion bill to the International Monetary Fund next month and trigger the collapse of the eurozone, its ministers have warned.
Interior minister Nikos Voutsis warned that a deal had to be struck over the 1.6billion euros being demanded by the IMF.
His remarks came as Greece’s finance minister Yanis Varoufakis cautioned that the entire euro project could unravel if Athens crashed out of the single currency.
Greece is due to hand over the money in four instalments in June as part of its settlement for the bail-out in 2011.
But Mr Voutsis said the government was determined to fight the lenders’ strategy of ‘asphyxiation’, warning: ‘This money will not be given and is not there to be given.’
Greece could be forced to leave the euro and revert to the drachma if it fails to pay its creditors. It is struggling to pay wages and pensions while meeting its debt obligations.
But Mr Varoufakis, the Greek finance minister, told the BBC’s Andrew Marr Show that if a deal was not made, it could also spell the end for the euro project.
‘It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,’ he said.
‘Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,’ he added.
Greece Points to June 5 as Next Cliffhanger
Bloomberg – Marcus Bensasson and Eleni Chrepa
The Greek government is priming investors for another cliffhanger on June 5.
While Greek Prime Minister Alexis Tsipras’s spokesman Gabriel Sakellaridis insisted on Monday that the government will pay salaries and pensions due at the end of this month, he refused to be drawn in on whether the administration will be able to find the roughly 300 million euros ($329 million) it’s due to pay the International Monetary Fund at the end of next week.
“This government has the responsibility to pay its obligations, both within Greece and externally,” Sakellaridis told reporters in Athens. “The liquidity problems are well known. We want to honor our obligations, and that’s exactly why we’re seeking this agreement soon.”
Greece looks set to miss the May 31 deadline German Chancellor Angela Merkel and French President Francois Hollande set last week for reaching an agreement on aid, with no more meetings of euro-area finance ministers scheduled before then and its creditors still to sign off on Tsipras’s economic plans.
Greek Economy Minister George Stathakis said in an interview with Le Monde newspaper today that it may still be several weeks until the two sides can reach an agreement, though a deal remains the most likely outcome.
The yield on Greek two-year bonds fell 78 basis points to 23.1 percent at 3:48 p.m. local time on Monday. Greek stocks fell with the ASE index 2.4 percent lower.
Some members of Tsipras’s Syriza party advocate defaulting on loans rather than backing down from the anti-austerity policies that swept it to power in January even if that leads the country out of the euro.The Greek government is priming investors for another cliffhanger on June 5.
While Tsipras is appealing to Greece’s creditors to reciprocate after his government backed down over key demands, German Finance Minister Wolfgang Schaeuble signaled little willingness to grant concessions.
“The problems are rooted in Greece,” Schaeuble said in a Deutschlandfunk radio interview aired Sunday. “And now Greece does have to fulfill its commitments.”
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