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Greece hopes for deal in May, as default fears grow - live updates Greece hopes for deal in May, as default fears grow - live updates
(about 3 hours later)
3.00pm BST15:00
At first glance, it’s not clear that Juncker’s new proposal contains enough reform measures to satisfy Greece’s creditors.
Delaying VAT rises, modifying labour reforms and lowering the primary surplus targets will all make a dent in Greece’s budgets. There’s no mention of new reforms to make up the gap.
Effectively it would unlock some aid for Athens today, in return for fiscal consolidation tomorrow.
2.38pm BST14:38
To Vima: Juncker proposes Greek breakthrough
Greek newspaper To Vima is reporting that EC president Jean-Claude Juncker has proposed a deal to break the deadlock between Greece and its lenders.
This deal include smaller primary budget surplus targets (just 0.75% this year, down from 3%), and also delay VAT changes until after the summer. A review of the sustainability of the pension system would also be delated until the autumn.
The plan would also see Greece’s collective bargaining agreements reviewed in light of ILO guidance on ‘best practice’ to improve competitiveness and reduce unemployment.
However, Greece would still implement the unpopular ENFIA property tax.
In return, Greece’s lenders would hand over €1.8bn of loans, plus the €1.9bn of profits that the ECB has made on its Greek bonds.
Here’s the story (in Greek).
#Greece | Big scoop by @tovimagr: Juncker submits proposal to break Greek impasse. 0.75% surplus in 2015, 2% in 2016 http://t.co/qvmKT6rwK9
According to To Vima, the plan is designed to “cut the Gordian knot”. It would remove the immediate danger of default and buy time for more negotiations over a new reform programme.
Paul Mason of Channel 4 is tweeting the key points now, along with some analysis:
My response to @tovimagr #Juncker leak. 1) IMF not likely to fund it. 2) It is a major throw of dice by @JunckerEU (1/5) #junckerleak
Re #Junckerleak (2/5) 3. It funds Greece thru summer but delays debt restructure til autumn. 4. It keeps the ENFIA tax = greeks hate it
#Junckerleak (3/5) as IMF recognieses - it’s a clear back loading of austerity, i.e. relaxation in Syriza’s favour
#junckerleak (4/5) concedes to Syriza a delay on pension reform and hands them labour market reform because ILO supports Greek position
#junckerleak doc would give Greece €5bn now but also opens up ECB access and ? QE… Syriza will hate some details but its a big relaxation
(re that last tweet, I think it actually unlocks around €4bn of aid -- but all will become clear later)
Updated at 2.51pm BST
2.15pm BST14:15
Reuters has now published Pierre Moscovici’s comments in Berlin this morning, in which the European Commissioner warned that time is running out:
“Time available to reach an agreement at staff level is now, I would say, very limited,” said Moscovici. “We have got to conclude before the end of May.”
“The only scenario that we consider in the Commission is Greece in the euro zone,” said the commissioner, adding that his political experience had taught him it was best not to discuss a Plan B “because that means you don’t believe in Plan A”.
2.13pm BST14:13
#Greece's bonds tumble on speculation banks weeks away from failure. 2yr yield jumps by 433bps http://t.co/GiFeaxv9rz pic.twitter.com/HEMIL8K0Bc
1.39pm BST13:39
Lunchtime summary: May deadline looms.....
Another day, another deadline. A quick recap.
1) Greece’s government has warned that it needs to reach a breakthrough with its creditors to unlock bailout funds by the end of this month.
Government spokesman Gabriel Sakellaridis told reporters in Athens today that:
“A deal is required immediately, this is why we are talking about the end of May, to resolve these critical liquidity issues.”
Sakellaridis also insisted that Greece would not accept a one-off bank deposit levy to resolve the cash crisis, pledging no repeat of the Cyprus bailout of 2013.
2) Bank officials, though, fear that the very mention of a bail-in could encourage Greeks to tap their bank accounts. One told us:
Many see it as the logical next step and after today’s statement we expect the outflows to increase.”
3) The European Commission has dampened Athens’ hopes of a breakthrough could be achieved that a summit of EU leaders in Riga on Thursday. A political deal cannot replace the detailed technical negotiations needed to unlock bailout funds, an EC spokesman said.
4) Two leaks over the weekend have raised concerns over Greece’s future. One showed that the IMF won’t accept a “quick and dirty” fudge over the current aid programme, and fears that Greece can’t meet this summer’s repayments.
The second leak revealed that Greece feared it couldn’t meet last week’s €750m repayment to the Fund [before eventually using emergency funds at the IMF].
5) Uncertainty over Greece’s future has hit its sovereign debt today, driving up bond yields.
FXTM Market Analyst Jameel Ahmad explains:
“Greece is continuing to remain as a headline attraction in the news and unfortunately it is repeatedly for the wrong reasons.
If it wasn’t worrisome enough for investors that the Greek economy has basically allowed itself to slip back into a recession, then the reports that it only avoided a potential default to the IMF by using an emergency reserves account from the IMF, to repay the IMF, will send sentiment to new lows.
6) The German Bundesbank has also weighed in, warning that Greece faces insolvency if it doesn’t take substantial reforms.
Updated at 1.58pm BST
12.43pm BST12:43
Bank officials fear more withdrawals
Over in Athens, bank officials say they now expect more people to remove savings, despite the government promising today that it won’t impose a levy on deposits.
Our correspondent Helena Smith reports:
The government’s pledge to leave bank accounts untouched in its battle to keep bankruptcy at bay does not appear to have convinced investors. Bank employees have been speaking of a marked increased in withdrawals by depositors in recent weeks.
“People are taking more or less everything they have got out of their accounts for fear that the government will be dipping into them next,” said an official talking on condition of anonymity at the Bank of Greece.
“Many see it as the logical next step and after today’s statement we expect the outflows to increase.”
Around €35bn is thought to have been withdrawn from Greek bank accounts since last December. Economists, politicians, bankers and officials are convinced that a Cyprus-style bail-in, if executed, would be the straw that broke the camel’s back.
“We would see the revolt that this crisis has not yet produced. There would be blood in the streets. The Greeks are not like the Cypriots,” added the Bank of Greece official.
“It was wrong of the government to even raise it as a possibility and once again speaks more of its inexperience [in office].”
(reminder: in 2013, Cyprus imposed a levy on all depositors with more than €100,000 in their accounts, as part of its eurozone bailout)
Meanwhile, prime minister Alexis Tsipras’ Syriza-led administration has been heavily criticised by former prime minister Antonis Samaras this morning.
Addressing the Federation of Greek Industries convention, Samaras accused the government of not only endangering the country’s future with increased talk of default and Grexit, but deluding Greeks.
“It is a government of non-decisions and it is still telling lies to the people,” said the head of the main opposition centre-right party, New Democracy.
Samaras added:
“It has promised everything to everyone and now it is telling lenders that they can’t pay [maturing debt], essentially pre-announcing a credit event.”
12.24pm BST12:24
Moscovici: Time is running out
Another flurry of newsflashes just landed, from European commissioner for economic affairs, Pierre Moscovici.
He’s trying to sound optimistic, saying that Greece and her creditors are closer to a “common understanding”, but warns that time is short.
12.18pm BST12:18
Germany’s central bank has waded into the debate today, warning that Greece must make “substantial” reforms to avoid falling into insolvency.
The Bundesbank cited the Greek crisis in its regular monthly report, saying:
“The current Greek government is obliged to make appropriate proposals, to implement those agreements that have been reached and thereby do their part to avoid the insolvency of the state, with strong repercussions for Greece.
A sustainable solution is not possible without substantial reform in Greece....
The Bundesbank also urged policymakers to hold Greece to its commitments:
Financial help should be linked to the relevant preconditions
12.05pm BST12:05
Greek government debt is taking a pummelling today.
The yield (or interest rate) on two-year bonds has jumped from 21.1% to 24%, showing a higher risk that Athens could default on the debt.
Greek 2-year yield now through 24% +300bps today. Ugly. pic.twitter.com/PJHjUKgQBP
11.54am BST11:54
The European Commission has just dampened hopes of a political breakthrough when EU leaders gather in Latvia on Thursday and Friday.
Margaritis Schinas, the EC’s top spokesman, told reporters in Brussels that negotiations over Greece’s reform programme have still not reached a deal, and are proceeding too slowly.
At midday presser, @MargSchinas being v careful on #Greece at Riga summit, but clearly signalling that's not place for a bailout deal
11.39am BST11:3911.39am BST11:39
The Greek government’s promise not to confiscate bank deposits has caused a flurry of concern among commentators and market experts:The Greek government’s promise not to confiscate bank deposits has caused a flurry of concern among commentators and market experts:
No one is suggesting or implying Cyprus-style bail-in of deposits for #Greece and suddenly Sakellaridis needs to deny such a scenario.No one is suggesting or implying Cyprus-style bail-in of deposits for #Greece and suddenly Sakellaridis needs to deny such a scenario.
Now everyone is talking about the possibility of bail-in. That's a serious gaffe.Now everyone is talking about the possibility of bail-in. That's a serious gaffe.
#GREECE #SAKELLARIDES: NO BAIL-IN PLAN SUCH AS CYPRUS; NO THIRD BAILOUT#GREECE #SAKELLARIDES: NO BAIL-IN PLAN SUCH AS CYPRUS; NO THIRD BAILOUT
Why did they have to go and say something silly like that? https://t.co/Sn9gxWjVybWhy did they have to go and say something silly like that? https://t.co/Sn9gxWjVyb
11.25am BST11:2511.25am BST11:25
A snap summary of the Greek government’s press briefing:A snap summary of the Greek government’s press briefing:
#Greece govt spox Sakellaridis: "There will be no Cyrpus-like solution! There will be no bail-in alternative. GR govt won't sign new MoU!"#Greece govt spox Sakellaridis: "There will be no Cyrpus-like solution! There will be no bail-in alternative. GR govt won't sign new MoU!"
And the markets don’t like the sound of it; Germany’s DAX has shed its early gains, and the FTSE 100 has now dipped into the red.And the markets don’t like the sound of it; Germany’s DAX has shed its early gains, and the FTSE 100 has now dipped into the red.
11.18am BST11:1811.18am BST11:18
Greek government spokesman Gabriel Sakellaridis added that Athens won’t implement a “Cyprus-style” solution, such as imposing losses on bank depositors.Greek government spokesman Gabriel Sakellaridis added that Athens won’t implement a “Cyprus-style” solution, such as imposing losses on bank depositors.
Govt spokesman Sakellaridis: Government won't sign 3rd bailout or agree to Cyprus-style solution #Greece pic.twitter.com/7uTaxnXEOFGovt spokesman Sakellaridis: Government won't sign 3rd bailout or agree to Cyprus-style solution #Greece pic.twitter.com/7uTaxnXEOF
*GREECE WON'T IMPOSE DEPOSITOR BAIL-IN, GOVT SPOKESMAN SAYS*GREECE WON'T IMPOSE DEPOSITOR BAIL-IN, GOVT SPOKESMAN SAYS
11.08am BST11:0811.08am BST11:08
Greece hopes to conclude talks in MayGreece hopes to conclude talks in May
Newsflashes are coming in from Athens, showing that the Greek government hopes to reach a deal by the end of May.Newsflashes are coming in from Athens, showing that the Greek government hopes to reach a deal by the end of May.
But spokesman Gabriel Sakellaridis also insisted that Greece is still sticking to its “red lines”.But spokesman Gabriel Sakellaridis also insisted that Greece is still sticking to its “red lines”.
And as flagged up earlier, the EU leaders’ summit in Riga on Thursday and Friday is seen as crucial.And as flagged up earlier, the EU leaders’ summit in Riga on Thursday and Friday is seen as crucial.
GREECE HOPES FOR POLITICAL AGREEMENT AT RIGA SUMMIT: SPOKESMANGREECE HOPES FOR POLITICAL AGREEMENT AT RIGA SUMMIT: SPOKESMAN
Hope springs eternal, but I can’t see how it translates into a deal unless there is compromise over those key economic reforms.Hope springs eternal, but I can’t see how it translates into a deal unless there is compromise over those key economic reforms.
Nor can Teneo Intelligence’s Wolf Piccoli:Nor can Teneo Intelligence’s Wolf Piccoli:
how do you say "wishful thinking" in Greek? or it is mere day-dreaming? https://t.co/aY0iDgWi01how do you say "wishful thinking" in Greek? or it is mere day-dreaming? https://t.co/aY0iDgWi01
Updated at 11.13am BSTUpdated at 11.13am BST
10.56am BST10:5610.56am BST10:56
The price of gold has hit a three-month high this morning, touching $1,230 per ounce for the first time since mid-February.The price of gold has hit a three-month high this morning, touching $1,230 per ounce for the first time since mid-February.
Demand for gold has risen after last week’s disappointing economic data, showing US consumer confidence and industrial production had dipped.Demand for gold has risen after last week’s disappointing economic data, showing US consumer confidence and industrial production had dipped.
But Sebastien Marlier, commodities analyst at the Economist Intelligence Unit, warns that this situation won’t last:But Sebastien Marlier, commodities analyst at the Economist Intelligence Unit, warns that this situation won’t last:
Gold will take a hit when the Fed eventually raises interest rates later this year.”Gold will take a hit when the Fed eventually raises interest rates later this year.”
10.20am BST10:2010.20am BST10:20
Two issues are looming over the UK this morning; Britain’s position in Europe, and the new government’s fiscal plans.Two issues are looming over the UK this morning; Britain’s position in Europe, and the new government’s fiscal plans.
Manufacturing firm JCB has shifted the tone of the debate over Brexit, saying Britain leave the European Union if David Cameron can’t cut the red tape holding back UK firms.Manufacturing firm JCB has shifted the tone of the debate over Brexit, saying Britain leave the European Union if David Cameron can’t cut the red tape holding back UK firms.
Related: JCB boss says EU exit could lift burden of bureaucracy on UK businessesRelated: JCB boss says EU exit could lift burden of bureaucracy on UK businesses
Britain’s civil servants are bracing for hefty job cuts when George Osborne presents a new budget on July 8.Britain’s civil servants are bracing for hefty job cuts when George Osborne presents a new budget on July 8.
Related: Tories may axe 100,000 civil service jobs over next half-decade, union warnsRelated: Tories may axe 100,000 civil service jobs over next half-decade, union warns
Chocolate maker Thorntons has announced the departure of its CEO, following some disappointing financial results:Chocolate maker Thorntons has announced the departure of its CEO, following some disappointing financial results:
Related: Thorntons' boss quits after supermarket sales fallRelated: Thorntons' boss quits after supermarket sales fall
And sales at sausage maker Cranswick are going with a bang.And sales at sausage maker Cranswick are going with a bang.
It reported today that revenues broke through the £1bn mark for the first time, including a 23% jump in exports outside the European Union.It reported today that revenues broke through the £1bn mark for the first time, including a 23% jump in exports outside the European Union.
9.57am BST09:579.57am BST09:57
Syriza members to discuss 'rupturing' from lenders.Syriza members to discuss 'rupturing' from lenders.
A group of influential members of the Syriza coalition have called a meeting tomorrow to discuss whether Greece should split from its creditors, rather than swallow fresh austerity.A group of influential members of the Syriza coalition have called a meeting tomorrow to discuss whether Greece should split from its creditors, rather than swallow fresh austerity.
Eurocrisis expert @GreekAnalyst reports that the gathering on Tuesday night will be attended by several “prominent” members of the left-wing group which won power in January, including:Eurocrisis expert @GreekAnalyst reports that the gathering on Tuesday night will be attended by several “prominent” members of the left-wing group which won power in January, including:
Antonis Davellos (SYRIZA Political Secretariat), John Millios (SYRIZA Central Committee), Sofi Papadogianni (SYRIZA Political Secretariat), Panos Lambrou (SYRIZA Political Secretariat), George Sapounas (SYRIZA Central Committee).Antonis Davellos (SYRIZA Political Secretariat), John Millios (SYRIZA Central Committee), Sofi Papadogianni (SYRIZA Political Secretariat), Panos Lambrou (SYRIZA Political Secretariat), George Sapounas (SYRIZA Central Committee).
The event captures the tensions at the heart of this crisis -- how can Syriza meet its pre-election pledges and stay true to its beliefs, while also committing to reforms that will allow its European partners to keep providing loans?The event captures the tensions at the heart of this crisis -- how can Syriza meet its pre-election pledges and stay true to its beliefs, while also committing to reforms that will allow its European partners to keep providing loans?
Here’s a flavour:Here’s a flavour:
We need to choose between the signing of the looming austerity agreement and the rupture with the lenders. SYRIZA cannot be turned into a party of austerity; neither can the government implement the Memorandum. This is the reason why, both domestically and abroad, proposals for the internal “cleansing” of SYRIZA and governmental solutions for “national unity” are put on the table.We need to choose between the signing of the looming austerity agreement and the rupture with the lenders. SYRIZA cannot be turned into a party of austerity; neither can the government implement the Memorandum. This is the reason why, both domestically and abroad, proposals for the internal “cleansing” of SYRIZA and governmental solutions for “national unity” are put on the table.
For all those reasons, the only way out is the choice of rupture with the lenders.For all those reasons, the only way out is the choice of rupture with the lenders.
Call for "rupture now" by the Political Secretariat & Central Committee of #Syriza http://t.co/cGcxZlGExD #GreeceCall for "rupture now" by the Political Secretariat & Central Committee of #Syriza http://t.co/cGcxZlGExD #Greece
Updated at 10.00am BSTUpdated at 10.00am BST
9.39am BST09:399.39am BST09:39
June is going to be a tense month, unless a deal does come soon.June is going to be a tense month, unless a deal does come soon.
Here's an update on Greece's repayment schedule h/t @SocieteGenerale pic.twitter.com/6AZFIUF5WXHere's an update on Greece's repayment schedule h/t @SocieteGenerale pic.twitter.com/6AZFIUF5WX
Updated at 9.39am BSTUpdated at 9.39am BST
9.33am BST09:339.33am BST09:33
Greece’s short-dated bonds are also weakening this morning:Greece’s short-dated bonds are also weakening this morning:
Greek yields this morning: 2y +110bps 4y +106bps 10y +26bpsGreek yields this morning: 2y +110bps 4y +106bps 10y +26bps
9.26am BST09:269.26am BST09:26
Robin Bew of the Economist Intelligence Unit reckons a Greek breakthrough will come in time, but it’s going to be a nailbiter....Robin Bew of the Economist Intelligence Unit reckons a Greek breakthrough will come in time, but it’s going to be a nailbiter....
Rumours that #Greece told #IMF it would miss last weeks payment, it was so tight. Think 60% chance of deal by end June. But 40% GrexitRumours that #Greece told #IMF it would miss last weeks payment, it was so tight. Think 60% chance of deal by end June. But 40% Grexit
9.15am BST09:159.15am BST09:15
Default fears hit Greek stocksDefault fears hit Greek stocks
The Athens stock market has fallen by 1.5% in early trading, as traders fret about the slow pace of progress.The Athens stock market has fallen by 1.5% in early trading, as traders fret about the slow pace of progress.
Financial shares are leading the fallers; the main banks are down at least 3%.Financial shares are leading the fallers; the main banks are down at least 3%.
Greek bonds are also suffering, following the news that the IMF fears Greece cannot meet its looming repayments (see opening post).Greek bonds are also suffering, following the news that the IMF fears Greece cannot meet its looming repayments (see opening post).
The yield on 10-year government debt has risen to 11.3%, from 10.9% on Friday night, showing that Greece’s debt is seen as riskier.The yield on 10-year government debt has risen to 11.3%, from 10.9% on Friday night, showing that Greece’s debt is seen as riskier.
Investors are pricing in a higher danger of default too:Investors are pricing in a higher danger of default too:
Greek 5yr default probability jumps as #Greece gets crunched on two fronts. http://t.co/Y4hTpTtCBr pic.twitter.com/dWowgqiVTIGreek 5yr default probability jumps as #Greece gets crunched on two fronts. http://t.co/Y4hTpTtCBr pic.twitter.com/dWowgqiVTI
Updated at 9.20am BSTUpdated at 9.20am BST
8.51am BST08:518.51am BST08:51
Greece’s finance minister, Yanis Varouvakis, will give his views on the crisis tonight when he’s interviewed on Greek TV.Greece’s finance minister, Yanis Varouvakis, will give his views on the crisis tonight when he’s interviewed on Greek TV.
Enikos will be providing a simultaneous translation into English (they reckon it doesn’t start until 11.30pm local time, alas)Enikos will be providing a simultaneous translation into English (they reckon it doesn’t start until 11.30pm local time, alas)
#Varoufakis live interview on Monday with simultaneous interpretation #Greece #enikos - http://t.co/2uJoqfyWg6 pic.twitter.com/nP7q7b17wQ#Varoufakis live interview on Monday with simultaneous interpretation #Greece #enikos - http://t.co/2uJoqfyWg6 pic.twitter.com/nP7q7b17wQ
8.41am BST08:418.41am BST08:41
De Guindos added that Europe does not have a “Plan B” for Greece - it wants the country to stay in the eurozone, and meet its commitments.De Guindos added that Europe does not have a “Plan B” for Greece - it wants the country to stay in the eurozone, and meet its commitments.
Spain’s Finmin Guindos: There is no wriggle room in bailout talks for Greece; there is no Plan BSpain’s Finmin Guindos: There is no wriggle room in bailout talks for Greece; there is no Plan B
8.35am BST08:358.35am BST08:35
Spanish minister: Still optimistic about GreeceSpanish minister: Still optimistic about Greece
Spain’s finance minister, Luis de Guindos, hasn’t given up hope over Greece.Spain’s finance minister, Luis de Guindos, hasn’t given up hope over Greece.
He just told reporters in Madrid that an agreement can be reached in the coming days, despite so much time having been frittered away.He just told reporters in Madrid that an agreement can be reached in the coming days, despite so much time having been frittered away.
Maria Tadeo, Bloomberg’s Madrid correspondent, has tweeted the details:Maria Tadeo, Bloomberg’s Madrid correspondent, has tweeted the details:
Guindos says he's 'optimistic' about greece, says deal can be achieved within days although a lot of time has been wastedGuindos says he's 'optimistic' about greece, says deal can be achieved within days although a lot of time has been wasted
Updated at 8.41am BSTUpdated at 8.41am BST
8.27am BST08:278.27am BST08:27
Greek fears appear to be weighing on the euro this morning. The single currency has lost half a cent against the US dollar in early trading, to $1.1398.Greek fears appear to be weighing on the euro this morning. The single currency has lost half a cent against the US dollar in early trading, to $1.1398.
Stan Shamu of IG reports that investors are cautious this morning:Stan Shamu of IG reports that investors are cautious this morning:
Greece will be front and centre this week as the country looks to secure a deal with its creditors while avoiding harsh austerity.Greece will be front and centre this week as the country looks to secure a deal with its creditors while avoiding harsh austerity.
8.19am BST08:198.19am BST08:19
Greece still hopes a deal can come soonGreece still hopes a deal can come soon
Greece’s government remains optimistic of a deal soon, perhaps at a summit meeting of EU leaders in Riga on Thursday and Friday.Greece’s government remains optimistic of a deal soon, perhaps at a summit meeting of EU leaders in Riga on Thursday and Friday.
Nikos Filis, spokesman for the parliamentary group of Prime Minister Alexis Tsipras’s Syriza party, told the Mega TV that:Nikos Filis, spokesman for the parliamentary group of Prime Minister Alexis Tsipras’s Syriza party, told the Mega TV that:
“We’re striving for a mutually beneficial agreement by Friday.“We’re striving for a mutually beneficial agreement by Friday.
However, Athens isn’t capitulating over its red lines (as the IMF confirmed in that leaked document). Filis explained:However, Athens isn’t capitulating over its red lines (as the IMF confirmed in that leaked document). Filis explained:
“Our mandate from the Greek people is to reach an agreement where we stay in the euro area without harsh austerity measures.”“Our mandate from the Greek people is to reach an agreement where we stay in the euro area without harsh austerity measures.”
8.08am BST08:088.08am BST08:08
Introduction: Growing fears over Greece's financesIntroduction: Growing fears over Greece's finances
Good morning, and welcome to our rolling coverage of the world economy, the financal markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financal markets, the eurozone and business.
Are we approaching the Greek endgame? Two documents published over the weekend show that Athens’ financial situation is increasingly fraught, as time to reach a deal with its creditors runs out.Are we approaching the Greek endgame? Two documents published over the weekend show that Athens’ financial situation is increasingly fraught, as time to reach a deal with its creditors runs out.
The first missive came from the International Monetary Fund, and was leaked to Paul Mason of Channel 4 on Saturday. It shows that the Fund believes there is “no possibility” of Greece meeting the payments due over the summer unless some bailout funds are unlocked soon.The first missive came from the International Monetary Fund, and was leaked to Paul Mason of Channel 4 on Saturday. It shows that the Fund believes there is “no possibility” of Greece meeting the payments due over the summer unless some bailout funds are unlocked soon.
The letter said there was still only limited progress between the two sides, while Greece is actually retreating on structural reforms.The letter said there was still only limited progress between the two sides, while Greece is actually retreating on structural reforms.
More here: IMF leak signals ‘progress’ with Greece, but threat of default in JuneMore here: IMF leak signals ‘progress’ with Greece, but threat of default in June
And it also warns that IMF will not accept a “quick and dirty” compromise to resolve the deadlock -- suggesting it might not hand over its share of the €7bn in outstanding bailout funds.And it also warns that IMF will not accept a “quick and dirty” compromise to resolve the deadlock -- suggesting it might not hand over its share of the €7bn in outstanding bailout funds.
Leaked #IMF confidential memo on #Greece. /via @paulmasonnews pic.twitter.com/UFeqGKlWahLeaked #IMF confidential memo on #Greece. /via @paulmasonnews pic.twitter.com/UFeqGKlWah
Sobering stuff. And that was compounded by news of a second letter, this time sent by Alexis Tsipras to the Fund last week, warning that Greece was almost out of cash.Sobering stuff. And that was compounded by news of a second letter, this time sent by Alexis Tsipras to the Fund last week, warning that Greece was almost out of cash.
The FT’s Peter Spiegel reports:The FT’s Peter Spiegel reports:
Greece came so close to defaulting on last week’s €750m International Monetary Fund repayment that the prime minister warned IMF chief Christine Lagarde he could not pay it without EU aid.Greece came so close to defaulting on last week’s €750m International Monetary Fund repayment that the prime minister warned IMF chief Christine Lagarde he could not pay it without EU aid.
Athens ultimately made the payment without financial assistance from the bloc but only by tapping a rarely used emergency account Greece holds at the fund — an unorthodox transaction that amounted to borrowing IMF funds to pay the IMF.Athens ultimately made the payment without financial assistance from the bloc but only by tapping a rarely used emergency account Greece holds at the fund — an unorthodox transaction that amounted to borrowing IMF funds to pay the IMF.
Alexis Tsipras wrote to Ms Lagarde, warning that the IMF repayment would be missed unless the European Central Bank immediately raised its curbs on Greece’s ability to issue short-term debt.Alexis Tsipras wrote to Ms Lagarde, warning that the IMF repayment would be missed unless the European Central Bank immediately raised its curbs on Greece’s ability to issue short-term debt.
More here: Tsipras letter reveals precariousness of Greece’s financesMore here: Tsipras letter reveals precariousness of Greece’s finances
As well as being ‘unorthodox’, the solution also can’t be repeated -- meaning next month’s payments are a new challenge:As well as being ‘unorthodox’, the solution also can’t be repeated -- meaning next month’s payments are a new challenge:
How long can #Greece carry on? There’s not much left over to make even small(ish) payments due to #IMF in June. (BBG) pic.twitter.com/mDESz6XogeHow long can #Greece carry on? There’s not much left over to make even small(ish) payments due to #IMF in June. (BBG) pic.twitter.com/mDESz6Xoge
We’ll be tracking all the main developments through the day....We’ll be tracking all the main developments through the day....
Updated at 8.42am BSTUpdated at 8.42am BST