Flat-out: Greece cannot make payment in June; Tsipras urges creditors to compromise. Greece in numbers
Greek Prime Minister Alexis Tsipras urged the country’s creditors to compromise on demands to break the standoff over the release of funds for its cash-strapped economy as a deadline neared for payments due next month to the International Monetary Fund.
"The four instalments for the IMF in June are €1.6bn, this money will not be given and is not there to be given," Nikos Voutsis told Greek TV on Sunday.
Prime Minister Alexis Tsipras said Greece can’t absorb
any more austerity measures, Finance Minister Yanis Varoufakis said his
government has met the euro area and IMF three-quarters of the way so
it’s up to creditors to cover the remainder.
“Greece has made enormous strides reaching a deal, it is now up to the institutions to do their bit,” Varoufakis said Sunday on BBC’s Andrew Marr Show. “It is not in their interests as our creditors that the cow that produces the milk should be beaten into submission to the extent that the milk will not be enough for them to get their money back.”
German Finance Minister Wolfgang Schaeuble, meanwhile, said that there isn’t much space for maneuver after Tsipras’s government committed to policy changes in return for aid in a Feb. 20 euro-area accord, adding that the problems are rooted in Greece and the country now has to complete its commitments.
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.
On May 8 Tsipras sent a letter to Greece’s creditors saying the country wouldn’t be able to pay about 750 million euros due to the IMF on May 12 without financing. The Greek government only decided to pay the amount after confirming it could use SDR or special drawing rights account reserves.
“We’ve done remarkably well for an economy that doesn’t have access to the money markets to meet our obligations,” Varoufakis said. “At some point we will not be able to do it.”
Opinions on euro exit
A Greek exit from the euro is just a matter of time and wouldn’t lead
to the breakup of monetary union, former Federal Reserve Chairman Alan
Greenspan told Het Financieele Dagblad in an interview published
Saturday.
Billionaire investor Warren Buffett said in an interview with the Euro-am-Sonntag newspaper that an exit could make the euro stronger.
Greece's Finance Minister Yanis Varoufakis, however, sticks to another opinion.
“Once you are in a monetary union, getting out of it is catastrophic,” Varoufakis said. “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 of the common currency project in Europe, whatever some analysts might be saying.”
"Once you infuse into people's minds, into investors' minds, the idea that the euro is not indivisible, it will be only a matter of time before the whole thing begins to unravel."
Greece in numbers
Greece and its main creditors - EU and IMF - have been locked in talks during four months over economic reforms the IMF and EU say must be carried out before more money is accessible.
August marked Greece's last cash injection from its international creditors, and the final €7.2bn installment from its two €240bn EU-IMF bailouts is now seen as vital. Before that, however, it has to meet the 5 June repayment deadline. If it does not reach a deal with the creditors, there is a fear it could default on its loans.
Greece has been shut out of bond markets, and with the current deadlock
Athens has been scraping through to meet debt obligations and to pay public
sector wages and pensions.
