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Despite all the spinning from Greece’s new coalition government, there’s a growing sense that the country just can’t make it.

Greece Rejects Blackmail, Tsipras Wants EU Roundtable

Reuters – Renee Maltezou and Costas Pitas

Greek Prime Minister Alexis Tsipras has requested a meeting with top European leaders including German Chancellor Angela Merkel at this week’s EU summit, a Greek official said on Tuesday, as Athens insisted it would not be ‘blackmailed’ over its debt crisis.

Greece is at risk of running out of cash within weeks but its EU partners, angered by the new government’s fiery rhetoric against its international bailout, have frozen financial aid until it shows evidence it is implementing reforms.

The leftist government was elected in January on a promise to scrap the bailout, widely hated for imposing years of austerity on Greeks, but was forced after acrimonious negotiations to accept a four-month extension to the end of June.

With tensions still running high, Greece attacked comments by Jeroen Dijsselbloem, head of the Eurogoup of euro zone finance ministers, who said that pressure on Athens was growing and it would only get an emergency loan if it made real progress on reforms.

He said he wanted to stop things from going as far as they had in Cyprus in 2013, when “the banks were closed a while, and capital controls – cash flows in the country and out of the country were tied to all manner of conditions”.

Greek government spokesman Gabriel Sakellaridis accused Dijsselbloem of going beyond his proper role. “We believe it is unnecessary to remind him that Greece cannot be blackmailed,” he said.

As well as Germany’s Merkel, Tsipras also wants European Central Bank chief Mario Draghi, European Commission head Jean-Claude Juncker and French President Francois Hollande to take part in the meeting on the sidelines of the EU summit, which takes place in Brussels on Thursday and Friday.

It appears to be the latest effort by Tsipras to hammer out with EU leaders a “political solution” to resolve Greece’s funding problems, which are worsening as the country remains shut out of debt markets.

Europe Should Give Greece a Chance

Financial Times – Yannis Dragasakis

It is a common belief that the Greek government is seeking special treatment relative to other stressed eurozone members. We are not; we are seeking equal treatment.

Since the onset of the crisis, our economy has shrunk 26 per cent; unemployment has risen from 8 to 26 per cent; and wages have declined 33 per cent.

These outcomes are worse than those experienced by any country during the 1930s and far worse than those projected under the two Greek adjustment programmes. This is why the Greek government has criticised these programmes.

Our fiscal adjustment has been larger than in other countries. Since 2009, spending cuts and tax increases amounting to more than 45 per cent of household disposable income have been implemented. In Portugal it was 20 per cent; in Italy and Ireland 15 per cent.

As a result, the country is in a position like that of Sisyphus — a man condemned to roll a boulder to the top of a hill, only to see it roll down again. Greeks have implemented austerity and have suffered much more than expected.

Many of the 60 per cent of young people out of work will one day be reclassified as long-term unemployed. We risk condemning an entire generation to a future without hope. To avoid that, what we ask from our eurozone partners is to treat Greece as an equal and help us escape from this Sisyphean trap.

Greece’s Euro Exit Seems Inevitable

Bloomberg – Mark Gilbert

Greece’s money troubles resemble a game of pass the parcel, where each successive participant rips another sheet of wrapping paper off the box — which turns out to be empty when the final recipient reaches the core.

With time and money running out, a successful endgame seems even less likely than it did a week or a month ago. It’s increasingly obvious that the government’s election promises are incompatible with the economic demands of its euro partners. Something’s got to give.

The current money-go-round is unsustainable. Euro-region taxpayers fund their governments, which in turn bankroll the European Central Bank.

Cash from the ECB’s Emergency Liquidity Scheme flows to the Greek banks; they buy treasury bills from their government, which uses the proceeds to … repay its International Monetary Fund debts! No wonder a recent poll by German broadcaster ZDF shows 52 percent of Germans say they want Greece out of the euro, up from 41 percent last month.

There’s blame on both sides for the current impasse. Euro-area leaders should be giving Greece breathing space to get its economic act together. But the Greek leadership has been cavalier in its treatment of its creditors.

It’s been amateurish in expecting that a vague promise to collect more taxes would win over Germany and its allies. And it’s been unrealistic in expecting the ECB to plug a funding gap in the absence of a political agreement for getting back to solvency.

Source: The National Herald
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