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Greek finance minister in informal talks with IMF over Greek debt crisis Greek political unrest and deepening debt crisis fuel talk of snap election
(34 minutes later)
The worsening Greek debt crisis has reanimated talk within the ruling Syriza party of a snap general election if discussions with creditors fail, as the country faces a Thursday deadline to repay a €450m (£330m) loan to the International Monetary Fund.The worsening Greek debt crisis has reanimated talk within the ruling Syriza party of a snap general election if discussions with creditors fail, as the country faces a Thursday deadline to repay a €450m (£330m) loan to the International Monetary Fund.
The Greek finance minister, Yanis Varoufakis, was scheduled to hold informal talks with IMF managing director Christine Lagarde in Washington on Sunday, while warnings of early elections underscored the political unrest in Athens. The Greek finance minister, Yanis Varoufakis, was scheduled to hold informal talks with the IMF’s managing director, Christine Lagarde, in Washington DC on Sunday, while warnings of early elections underscored the political unrest in Athens.
The slow pace of negotiations with creditors and worsening state of the Greek economy brought a warning from the far-left Syriza party of snap polls being held before the summer – just months after winning power. The slow pace of negotiations with creditors and worsening state of the Greek economy brought a warning from the far-left Syriza of snap polls being held before the summer – just months after winning power.
“If we are not satisfied [with the outcome] we will go to the people,” Kostas Chrysogonos, a prominent Syriza MEP told local media at the weekend. “We have a popular mandate to bring about a better result,” he said of the talks aimed at concluding a reform-for-cash programme to keep the crisis-hit country afloat. “If, ultimately, creditors insist on following an inflexible line … then the electoral body will have to assume its responsibilities.”“If we are not satisfied [with the outcome] we will go to the people,” Kostas Chrysogonos, a prominent Syriza MEP told local media at the weekend. “We have a popular mandate to bring about a better result,” he said of the talks aimed at concluding a reform-for-cash programme to keep the crisis-hit country afloat. “If, ultimately, creditors insist on following an inflexible line … then the electoral body will have to assume its responsibilities.”
Varoufakis’ unexpected meeting with the IMF chief has been arranged as senior government officials repeated assurances that Greece was not about to to default on its debt repayments. The deputy finance minister, Dimitris Mardas, said the IMF payment would be made and civil service wages would be paid. “There is money for the payment of salaries, pensions and whatever else is needed in the next week.”Varoufakis’ unexpected meeting with the IMF chief has been arranged as senior government officials repeated assurances that Greece was not about to to default on its debt repayments. The deputy finance minister, Dimitris Mardas, said the IMF payment would be made and civil service wages would be paid. “There is money for the payment of salaries, pensions and whatever else is needed in the next week.”
The prospect of renewed political strife in Greece coincided with mounting dissent withinSyriza over the extent to which it should roll back on pre-electoral reforms.The prospect of renewed political strife in Greece coincided with mounting dissent withinSyriza over the extent to which it should roll back on pre-electoral reforms.
The anti-austerity government led by prime minister Alexis Tsiprashas found itself increasingly cornered with creditors – the so-called troika of the IMF, the European Union and the European Central Bank – refusing to endorse proposed reforms under an extension of its €240bn (£176bn) bailout. Militants lead by energy minister Panagiotis Lafazanis have ratcheted up the pressure by rejecting any notion of making necessary concessions starting with privatisations. The anti-austerity government led by Alexis Tsipras has found itself increasingly cornered with creditors – the so-called troika of the IMF, the European Union and the European Central Bank – refusing to endorse proposed reforms under an extension of its €240bn (£176bn) bailout. Militants led by energy minister Panagiotis Lafazanis have ratcheted up the pressure by rejecting any notion of making necessary concessions starting with privatisations.
On Sunday, Lafazanis, who heads Syriza’s far left faction, denounced Greece’s international creditors for treating the country with “unbelievable prejudice and as a colony.” Raising the prospect of a deal with Russia, he said: “A Greek-Russian agreement would help our country greatly in negotiations with lenders.” On Sunday, Lafazanis denounced Greece’s international creditors for treating the country with “unbelievable prejudice and as a colony”. Raising the prospect of a deal with Russia, he said, “A Greek-Russian agreement would help our country greatly in negotiations with lenders.”
Despite weekend assertions that Sunday’s talks were part of the negotiation process, Athens is believed to harbour hopes that the IMF – which has proved to be a more conciliatory partner than either the EU or ECB in negotiations – will agree to cut the government some slack when Varoufakis discusses the reform programme with Lagarde. On Friday, Syriza’s parliamentary spokesman, Nikos Filis, also piled on the pressure saying Tsipras’ leftist-led coalition would prefer to pay salaries and pensions than bondholders if forced to make a choice. Despite assertions over the weekend that Sunday’s talks were part of the negotiation process, Athens is believed to harbour hopes that the IMF – which has proved to be a more conciliatory partner than either the EU or ECB in negotiations – will agree to cut the government some slack when Varoufakis discusses the reform programme with Lagarde. On Friday, Syriza’s parliamentary spokesman, Nikos Filis, also piled on the pressure saying Tsipras’ leftist-led coalition would prefer to pay salaries and pensions than bondholders if forced to make a choice.
According to the Greek finance ministry statement, the talks between Lagarde and Varoufakis are an “informal discussion of Greece’s reform plan”. A further round of meetings between Varoufakis and US Treasury officials is planned for Monday.According to the Greek finance ministry statement, the talks between Lagarde and Varoufakis are an “informal discussion of Greece’s reform plan”. A further round of meetings between Varoufakis and US Treasury officials is planned for Monday.
The surprise trip to Washington comes ahead of a looming 9 April deadline when Greece must pay €450m to the IMF.The surprise trip to Washington comes ahead of a looming 9 April deadline when Greece must pay €450m to the IMF.
Investors are increasingly nervous that Greece will default on the 9 April repayment, amid rumours that the Syriza-led government is running out of cash.Investors are increasingly nervous that Greece will default on the 9 April repayment, amid rumours that the Syriza-led government is running out of cash.
Greek officials have denied these rumours and criticised leaks from the EU institutions suggesting that Athens will be unable to meet its obligations to the IMF as a “deliberate rumour campaign”.Greek officials have denied these rumours and criticised leaks from the EU institutions suggesting that Athens will be unable to meet its obligations to the IMF as a “deliberate rumour campaign”.
Negotiations between Greece and its creditors over the next tranche of the country’s bailout – worth more than €7bn – have stalled over disagreement about Syriza’s economic reform plans. Greece has not received any bailout funds since August last year, and the Syriza-led government has so far failed to convince its eurozone partners to dole out remaining funds in the bailout pot.Negotiations between Greece and its creditors over the next tranche of the country’s bailout – worth more than €7bn – have stalled over disagreement about Syriza’s economic reform plans. Greece has not received any bailout funds since August last year, and the Syriza-led government has so far failed to convince its eurozone partners to dole out remaining funds in the bailout pot.
Eurozone deputy finance ministers will discuss Greece’s proposals on Wednesday and Thursday, but are not expected to reach an agreement.Eurozone deputy finance ministers will discuss Greece’s proposals on Wednesday and Thursday, but are not expected to reach an agreement.
A teleconference between the same group last week ended in stalemate after Greece refused to implement reforms agreed by the previous government that would have broken pledges Syriza made when it was elected in January. Eurozone finance ministers, including Germany’s Wolfgang Schäuble, said Greece could only get the remainder of the funds if it agreed to reforms, such as cutting pensions. But Greece insists it can raise money through “non-recessionary” measures, such as a clampdown on tax avoidance.A teleconference between the same group last week ended in stalemate after Greece refused to implement reforms agreed by the previous government that would have broken pledges Syriza made when it was elected in January. Eurozone finance ministers, including Germany’s Wolfgang Schäuble, said Greece could only get the remainder of the funds if it agreed to reforms, such as cutting pensions. But Greece insists it can raise money through “non-recessionary” measures, such as a clampdown on tax avoidance.
EU officials told Reuters that progress had been made, but more work was needed to reach a deal. Hopes of a breakthrough are now being pinned on the next meeting of eurozone finance ministers on 24 April.EU officials told Reuters that progress had been made, but more work was needed to reach a deal. Hopes of a breakthrough are now being pinned on the next meeting of eurozone finance ministers on 24 April.