With cash dwindling and time running out for a deal, Greece and its international lenders are blaming each other for failures, world press reports say.
What Happens if Greece Can’t Pay its Debts?
The Guardian – Philip Inman
his time it’s real: Greece has wriggled out of looming national bankruptcy on numerous occasions over the past five years, but now it has just a few weeks left before it must sign a new debt deal with its eurozone partners and the IMF – or find itself heading for an exit door that leads back to the drachma.
On Friday, after a meeting of eurozone finance ministers in the Latvian capital Riga, the signs were ominous. Malta’s finance minister Edward Scicluna, said: “I would describe today’s meeting as a complete breakdown in communication with Greece.”
The Dutch finance minister and chair of the 19-member eurogroup, Jeroen Dijsselbloem, warned that it was very hard to consider a new programme for Greece to cover its funding needs beyond June, given the lack of recent progress.
Time was running out, he said, again ruling out giving Greece a slice of the €7.2bn (£5.1bn) of previously agreed bailout cash being held back until a series of self-help economic reforms, ranging from a privatisation programme to pension changes, were agreed.
Since January the newly elected radical-left government in Athens has fought for a complete overhaul of a £180bn rescue package that was due to end in February but was extended until June while new terms were discussed.
The last three months have produced a series of meetings characterised by increasing frustration on both sides. Officials in Brussels have become tetchy and irritated at the lack of detail from Athens about planned reforms.
A series of speeches by finance minister Yanis Varoufakis, which have been highly critical of “orthodox” and “failed” policies championed by Brussels, has also driven a wedge between them….
If the cash runs out, Tsipras could pay workers and welfare payments and delay IMF payments. He has already asked for the IMF to accept a delay and been rebuffed.
The IMF pointed out during its recent spring conference that any such delays will not be countenanced: it has not happened in 30 years, and prior to that only to the poorest of central African nations.
Without a deal, the opposition will demand fresh elections rather than see Greece crash out of the euro. The Syriza/Anel coalition remains strong, but Tsipras could be forced to go down this route or offer a referendum.
Deputy prime minister Yannis Dragasakis said these alternatives are “at the back of our mind, as options to seek a solution, in case of deadlock”.
These routes are strewn with mines ready to explode, in particular, the consistent support for remaining inside the euro area. There are plenty of MPs in Syriza and the populist Anel in favour of monetary independence, but this is a minority view among voters….
Greece, Troika Blame Game Goes On
Reuters – Paul Taylor
The game of chicken between Greece and its international creditors is turning into a vicious blame game as Athens lurches closer to bankruptcy with no cash-for-reform agreement in sight.
Europe’s political leaders and central bankers and Greek politicians agree on only one thing: if Greece goes down, they don’t want their fingerprints on the murder weapon.
If Athens runs out of cash and defaults in the coming weeks, as seems increasingly possible, no one wants to be accused of having pushed it over the edge or failed to try to save it.
Greece’s leftist government has already identified its culprit of choice – Germany, Europe’s main paymaster, accused of having inflicted toxic austerity policies on Greeks, causing a “humanitarian crisis”.
Euro zone governments are preparing the ground to blame the novice government of Prime Minister Alexis Tsipras for having blustered, obstructed, failed to meet commitments and evaded hard choices while Athens burned.
“We are doing everything we can to save Greece from itself, but in the end, it’s up to them,” is the message pouring out of Berlin, Brussels and IMF headquarters in Washington.
Tsipras and outspoken Finance Minister Yanis Varoufakis tried at first to mount a coalition against Berlin, touring France, Italy, Britain, Brussels and media studios after their election. They found no allies outside the media….
Angry euro zone finance ministers made clear they were far from a deal with Greece, rejected Varoufakis’ plea for early cash in return for partial reform and told him they would not even discuss longer-term funding and debt relief until Greece signed and implemented a full reform plan.
While Greece’s leaders insist Europe must heed and respect the democratic will of the Greek people, its creditors reply that they too have democratic mandates from their voters.
In Varoufakis’ narrative, euro zone countries did not lend all that money to save Greece in the first place but to protect their own banks, which had imprudently lent Athens billions.
Nonsense, say euro zone officials. Those banks took losses in 2012 when Greek debt to private bondholders was restructured.
Varoufakis has widened the circle of blame to the ECB, accusing it of “asphyxiating” Greece by starving its banks of liquidity and severely limiting their short-term lending to the government….
EU Ministers Upset No Greece Plan B
Bloomberg – Ian Wishart, Jonathan Stearns, and Corina Ruhe
Europe’s refusal to draw up contingency plans to prepare for the failure of negotiations with Greece is alarming some euro-area finance ministers.
Slovenian finance chief Dusan Mramor led the calls at a meeting of the bloc’s 19 finance chiefs on Friday to consider a “plan B” to mitigate the fallout if negotiations with Greece fail. Several others raised similar concerns during official talks and in private conversations at a meeting in Riga, Latvia, on Friday, two people with knowledge of the discussions said.
“What my discussion was about was what we will do if no new program will be achieved in time for Greece to be able to refinance itself or improve liquidity,” Mramor told reporters on Saturday.
“A plan B can be anything.”
As Greece struggles to pay pensions and salaries, its government has failed to present a plan to revamp its economy that passes muster with euro-area officials who are withholding further aid.
In February, finance ministers gave the Greek government until the end of June to complete the deal and said they expected a list of reforms by the end of April.
Friday’s meeting, which European Union officials had for weeks identified as the moment when the list would be considered, instead descended into attacks on Greek Finance Minister Yanis Varoufakis for his failure to deliver.
“Some countries have said, because of their concern on the lack of progress and the attitude on the Greek side, ‘if it continues like this, we will really get into trouble,’” Dutch Finance Minister Jeroen Dijsselbloem, who led Friday’s meeting, told reporters on Saturday. “In that context plan B has been mentioned.”
Still, ministers were left frustrated that European Economic Commissioner Pierre Moscovici clamped down on discussions of a backup plan. They went on to air their concerns without him, one of the people said.
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