So Be It
The Times report that the seemingly never-ending financial crisis in Greece may be coming to a crunch with the Syriza-led government claiming there's no money left to pay their debts and if push comes to shove, they'll pay salaries and pensions rather than the IMF.
Now this sounds very noble, but in reality it's all about juvenile politics because the real choice facing Greece is to raise sufficient taxes to meet their debt repayments at the same time as fulfilling their obligations to public sector workers.
By reinstating a tax on second homes, for example, which Syriza scrapped soon after coming to power, as if citizens in the rest of Europe ought to feel sorry for their Greek neighbours who are sufficiently well off to own a holiday home.
So the sooner Syriza's bluff is called the better and if Greece drops out of the Euro, does anyone really care?
Default looms as Greece warns ‘there is no money left to pay debts
Money talks: Yanis Varoufakis with George Osborne at a recent finance minister's meeting Emmanuel Dunand/Getty Images
By Anthee Carassavas and Bruno Waterfield - The Times
Greece has warned that there is “no money left” to pay a debt instalment to the International Monetary Fund in a fortnight’s time, raising the spectre of an imminent default.
Syriza, Greece’s ruling left-wing party, has warned the eurozone and IMF that it can not pay a €307 million debt repayment due in in 14 days as the highly indebted country runs out of cash at the end of the month.
“There is no money and the moment of truth for Greece is June 5,” said Nikos Filis, Syriza’s parliamentary spokesman. “If there is no deal by then that will address the current funding problem, they won’t get any money.”
Eurozone and IMF officials are withholding €7.2 billion in bailout loans until Greece honours previous austerity commitments, including cuts to pensions and labour reforms making it easier to cut wages or sack workers.
The admission that state coffers are empty and that Greece would rather default than accept austerity measures is the first to be so publicly made by the government. It comes as Greece struggles to pay pension and public sector wages at the end of this month.
“The tables have turned,” said Mr Filis. “Non-payment and default is, now, part of the discussion. We don’t have to pay it. If forced to choose between paying out pensions and salaries or the IMF, it will be the first.”
A Greek default on IMF repayments would trigger a major eurozone crisis this summer, leading to capital controls, plunging Greece into economic meltdown and, almost certainly, leading to the break-up of the euro.
The euro slid to a two-week low ending a rally in shares on Wednesday after the Greek threat heralding a turbulent summer ahead for Europe’s economies and putting a sluggish European recovery at risk.
Talks have been deadlocked since Syriza came to power in January after being elected on a manifesto of opposing EU and IMF austerity measures that were imposed as the condition of Greek bailouts worth a total of €240 billion in 2010 and 2012.
“It’s high time for them to rise to the occasion and deliver in these talks, ” said Yanis Varoufakis, the Greek finance minister, said. “We have drafted measures, made revisions to them and costed solutions that would avert added austerity. Now, they have to make some concessions.”
Pierre Moscovici, the EU’s economic affairs commissioner, warned that while progress had been made in recent weeks, the Greek government still needed to back down on key austerity measures, described as “red lines” by Syriza.
“We must now go quickly, we must accelerate, a deal must be reached in the next few weeks. I think it’s doable,” he told a French senate committee. “But we are not there yet. Big gaps remain in particular on pensions and labour rules.”
Without loans - and a third bailout later this year - Greece will be unable to pay IMF bailout instalments totalling €1.5 billion in June, followed by payments of over €5 billion owed to the eurozone and the IMF in July.
Greece has warned that there is “no money left” to pay a debt instalment to the International Monetary Fund in a fortnight’s time, raising the spectre of an imminent default.
Syriza, Greece’s ruling left-wing party, has warned the eurozone and IMF that it can not pay a €307 million debt repayment due in in 14 days as the highly indebted country runs out of cash at the end of the month.
“There is no money and the moment of truth for Greece is June 5,” said Nikos Filis, Syriza’s parliamentary spokesman. “If there is no deal by then that will address the current funding problem, they won’t get any money.”
Eurozone and IMF officials are withholding €7.2 billion in bailout loans until Greece honours previous austerity commitments, including cuts to pensions and labour reforms making it easier to cut wages or sack workers.
The admission that state coffers are empty and that Greece would rather default than accept austerity measures is the first to be so publicly made by the government. It comes as Greece struggles to pay pension and public sector wages at the end of this month.
“The tables have turned,” said Mr Filis. “Non-payment and default is, now, part of the discussion. We don’t have to pay it. If forced to choose between paying out pensions and salaries or the IMF, it will be the first.”
A Greek default on IMF repayments would trigger a major eurozone crisis this summer, leading to capital controls, plunging Greece into economic meltdown and, almost certainly, leading to the break-up of the euro.
The euro slid to a two-week low ending a rally in shares on Wednesday after the Greek threat heralding a turbulent summer ahead for Europe’s economies and putting a sluggish European recovery at risk.
Talks have been deadlocked since Syriza came to power in January after being elected on a manifesto of opposing EU and IMF austerity measures that were imposed as the condition of Greek bailouts worth a total of €240 billion in 2010 and 2012.
“It’s high time for them to rise to the occasion and deliver in these talks, ” said Yanis Varoufakis, the Greek finance minister, said. “We have drafted measures, made revisions to them and costed solutions that would avert added austerity. Now, they have to make some concessions.”
Pierre Moscovici, the EU’s economic affairs commissioner, warned that while progress had been made in recent weeks, the Greek government still needed to back down on key austerity measures, described as “red lines” by Syriza.
“We must now go quickly, we must accelerate, a deal must be reached in the next few weeks. I think it’s doable,” he told a French senate committee. “But we are not there yet. Big gaps remain in particular on pensions and labour rules.”
Without loans - and a third bailout later this year - Greece will be unable to pay IMF bailout instalments totalling €1.5 billion in June, followed by payments of over €5 billion owed to the eurozone and the IMF in July.
