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Greece’s Governing Party Adds to Pressure From Country’s Creditors Tsipras Declares Creditors’ Debt Proposal for Greece ‘Absurd’
(about 4 hours later)
Members of Greece’s governing Syriza party and government officials amplified their dissent on Friday over a new bailout plan proposed by Greece’s creditors, hours before Prime Minister Alexis Tsipras was scheduled to address what was likely to be a raucous session of the Greek Parliament. Prime Minister Alexis Tsipras declared on Friday that his government would not accept a new bailout plan proposed this week by Greece’s creditors, telling a cheering assembly of the Greek Parliament in Athens that he would not allow the creditors to “humiliate” the country.
The turmoil comes a day after Greece said it would not make a scheduled debt repayment to the International Monetary Fund on Friday, a decision that bought the country some time to renegotiate a new debt deal with its international creditors but that raised further uncertainties about whether an agreement could be reached. “Greek people should be proud, because the government is not going to give in to absurd proposals,” Mr. Tsipras said.
Investors responded on Friday by selling Greek stocks and bonds. Some members of the Tsipras government said new elections might be necessary if Greece’s creditors do not show more willingness to compromise. Despite the rhetoric, Mr. Tsipras said he believed Greece and its creditors were “closer than ever” to an agreement, noting that “it is clear now to everyone” that Greece’s plans are “realistic.”
Even as the prime minister braced for a domestic political uproar on Friday, he stirred international politics by speaking with President Vladimir V. Putin of Russia by telephone to discuss energy and business cooperation before Mr. Tsipras’s visit to St. Petersburg this month for an economic forum. The government’s negotiating strategy will “soon bear fruit,” he said.
He called on the government’s opposition members, who include former Prime Minister Antonis Samaras, to declare whether they would support the deal being offered by Greece’s international creditors — the International Monetary Fund, the European Central Bank and the other eurozone countries.
Mr. Tsipras’s defiant speech, broadcast live on national television and picked up internationally by the BBC, seemed aimed most directly at a rising faction of dissenters on the far left of his party. A number of the dissenters have called for Mr. Tsipras to repudiate the creditors’ demands or even consider holding new elections to reaffirm his government’s mandate to push back against austerity.
The speech came a day after Greece said it would not make a scheduled debt repayment to the I.M.F. that was due on Friday. That decision bought the country some time to renegotiate a new debt deal with its international creditors but raised further uncertainties about whether an agreement could be reached.
Drawing lawmakers’ applause Friday night, Mr. Tsipras described the creditors’ plan as including “impossible targets,” a reference to austerity measures that he said he was elected to repudiate, including higher electricity taxes and further pension cuts to help bring down Greece’s mountain of debt.
He added that he was “unpleasantly surprised” by the proposal as it was presented to him this week in Brussels by the European Commission’s president, Jean-Claude Juncker.
Mr. Juncker has tried to play something of a peacemaker between Athens and Greece’s creditors, many of whom are exasperated with what they see as Greek slowness in putting into effect reforms promised by the previous government in exchange for bailout loans.
Without a new agreement with the creditors, Greece could run out of money and default on its debts in a matter of weeks. If that happens, one big fear is that Greece either will be forced or will choose to leave the eurozone, threatening the integrity of the euro currency union.
“We don’t just need an agreement, we need a solution — a solution that will end once and for all the discussion about an exit of Greece from the eurozone,” Mr. Tsipras said.
Mr. Tsipras said a counterproposal that he sent to the creditors in the last week, which contained considerably easier terms for releasing some 7.2 billion euros, or about $8 billion, in fresh financial aid, was the only “realistic” plan and was the basis on which he would negotiate.
The creditors’ plan, by contrast, seemed to be some kind of “bad negotiating trick,” he said, adding that he hoped the proposal would be withdrawn.
“Let us not back down from our just demands,” he said.
Before Greece sends creditors its counterproposals, he asked for opposition parties to offer theirs and to clarify whether they would back the creditors’ plan.
Mr. Samaras took the floor and directed sharp comments at Mr. Tsipras. “You lied to the Greek people,” he said. “The country is heading toward a third memorandum” — a reference to a third bailout program.
Greece agreed to bailout programs in 2010 and 2012, totaling €240 billion.
Even as the prime minister braced for a domestic political uproar on Friday, he stirred international politics by speaking with President Vladimir V. Putin of Russia by telephone to discuss energy and business cooperation before Mr. Tsipras’s planned visit to St. Petersburg this month for an economic forum.
Mr. Putin and Mr. Tsipras previously held conversations about a gas pipeline project that Moscow would like to pursue with Greece, but which the United States has urged Athens to resist.Mr. Putin and Mr. Tsipras previously held conversations about a gas pipeline project that Moscow would like to pursue with Greece, but which the United States has urged Athens to resist.
The call came as Greece and its creditors the I.M.F., the European Central Bank and other eurozone countries hit a new stalemate over negotiations to provide emergency funds to Athens as its coffers run dry. The timing has raised questions about what Mr. Tsipras intends to achieve, other than sending signals that his country might have other sources of financial aid if he and his European creditors cannot come to terms. The timing has raised questions about what Mr. Tsipras intends to achieve, other than sending signals that his country might have other sources of financial aid if he and his European creditors cannot come to terms.
The Greek government made a point of publicizing the Tsipras-Putin call and of describing some of its contents. The two leaders discussed Greece’s potential participation in a so-called BRICS investment bank, a development bank intended to rival the I.M.F. and the World Bank, whose aim is to be provide investment funds to emerging market countries. BRICS stands for Brazil, Russia, India, China and South Africa. A Greek government official made a point of publicizing the Tsipras-Putin call.
The Greek government did not disclose further details of the conversation. The Athens stock market fell on Friday by 5 percent, pulled down by the shares of big Greek banks. Greek bonds also fell from favor, driving up yields a measure of government borrowing costs nearly three percentage points, to just below 24 percent on the two-year bond.
The Athens stock market slumped on Friday, falling 5 percent in afternoon trading, pulled down by the shares of big Greek banks. Greek bonds also fell from favor, driving up the yields — a measure of the government’s borrowing costs — nearly 3 percentage points, to 24.4 percent on the two-year bond.
European financial markets were down broadly on Friday, partly over the Greece uncertainties.European financial markets were down broadly on Friday, partly over the Greece uncertainties.
Athens has proposed bundling the 1.6 billion euros, or $1.8 billion, it owes the I.M.F. in June into a single payment at the end of the month, largely in anticipation that a bailout deal will be reached by then, although the Fitch Ratings Agency warned Friday that the risk that Greece would default altogether on those debts “cannot be discounted.”Athens has proposed bundling the 1.6 billion euros, or $1.8 billion, it owes the I.M.F. in June into a single payment at the end of the month, largely in anticipation that a bailout deal will be reached by then, although the Fitch Ratings Agency warned Friday that the risk that Greece would default altogether on those debts “cannot be discounted.”
A missed payment, Fitch warned, could lead the European Central Bank to restrict the emergency funding it is providing to Greek banks, and could force the government to place limits on how much money depositors can withdraw from the banks.A missed payment, Fitch warned, could lead the European Central Bank to restrict the emergency funding it is providing to Greek banks, and could force the government to place limits on how much money depositors can withdraw from the banks.
Syriza lawmakers continued to show their displeasure with the latest proposal from Greece’s creditors setting out the conditions to disburse additional funds to the country’s strapped government. A deputy minister said the government might call for new elections if creditors did not relax their demands. A new opinion poll on Friday showed that four in 10 Greeks supported holding new elections. Greece’s deputy social security minister, Dimitris Stratoulis, a Syriza hard-liner, told Greek television on Friday that if the country’s creditors “do not back down from this package of blackmail,” the government would “have to seek alternative solutions elections.”
The deputy social security minister, Dimitris Stratoulis, a Syriza hard-liner, told Greek television on Friday that the lenders wanted to impose hard measures. “If they do not back down from this package of blackmail,” he said, the government would “have to seek alternative solutions elections.” A new opinion poll on Friday showed that four in 10 Greeks supported holding new elections.
The threat of new elections might be yet another bargaining tactic as Greece negotiates with creditors to try to keep further austerity conditions from any bailout deal. Opinion polls show that if elections were held today, Syriza, which swept to power on pledges to repudiate austerity, would very likely win. A victory would be the second affirmation in less than six months that the Greek electorate backs Mr. Tsipras’s anti-austerity drive.The threat of new elections might be yet another bargaining tactic as Greece negotiates with creditors to try to keep further austerity conditions from any bailout deal. Opinion polls show that if elections were held today, Syriza, which swept to power on pledges to repudiate austerity, would very likely win. A victory would be the second affirmation in less than six months that the Greek electorate backs Mr. Tsipras’s anti-austerity drive.
“If the people reaffirmed the present government, it would be more embarrassing for the Europeans” pressing for continued — even if watered-down — austerity in Greece, said Harry Papasotiriou, a political professor at Panteion University in Athens. “It would reaffirm the current Greek government’s mandate,” he said. “If the people reaffirmed the present government, it would be more embarrassing for the Europeans” pressing for continued — even if watered-down — austerity in Greece, said Harry Papasotiriou, a professor of political science at Panteion University in Athens. “It would reaffirm the current Greek government’s mandate.”
Elections might also provide Mr. Tsipras with an opportunity to sweep far-left dissenters from the ranks of Syriza, by not putting them on electoral lists, Mr. Papasotiriou added.Elections might also provide Mr. Tsipras with an opportunity to sweep far-left dissenters from the ranks of Syriza, by not putting them on electoral lists, Mr. Papasotiriou added.
The economy minister, Georgios Stathakis, reiterated on Friday that Greece would not accept the current proposal from its creditors. But he added that the government was prepared to negotiate a compromise.
“We are looking forward to getting a deal as soon as possible,” Mr. Stathakis told BBC Radio.
On Thursday, Greece bought itself some breathing room in those negotiations by deferring a series of debt payments to the I.M.F. until the end of the month, including a loan repayment of €300 million, or about $340 million, that was due on Friday. Mr. Stathakis told the BBC that Greece had, in fact, scraped together the money but had decided to take the option — as set down in the I.M.F.’s rule book — of bundling all the payments at the end of the month.
A Greek official, speaking only on the condition of anonymity, as is the government’s policy, said on Friday that the next move was up to the creditors. The official added that an alternate plan proposed by Athens this week reflected months of negotiations between technical teams from Athens and Greece’s creditors.
The creditors’ new proposal contains some compromises, including lower annual targets for primary surpluses — the amount of revenue Greece is required to hold in its coffers after expenses have been paid and before servicing its debt. A lower primary surplus would free up more money for Athens to spend on stimulating its economy.
But the proposal also included calls for further cuts to pension spending, tax increases and other painful measures that the Syriza party has vowed to reject.
That plan returned both sides “to the memorandum program that was rejected at the elections of Jan. 25,” the government official said, referring to the elections in which Mr. Tsipras swept to power amid promises to push back against harsh austerity programs that creditors have required under Greece’s bailouts.