The weekend is over, and the Greek government hasn’t had to bring capital controls in. That’s about the only piece of good news that’s come out of Athens in recent days.
The government owes its latest debt repayment to the International Monetary Fund (IMF) on Friday June 5. Since the country had to dig into a reserve account at the institution to make its last payment, it seems very unlikely that Athens had the cash to pay.
The IMF has said that Greece could bundle the €1.6 billion ($US1.75 billion, £1.15 billion) in payments it owes in June into one (it’s currently spread across four instalments). That buys Greece some time, but doesn’t make the actual payments any easier. That would push the hard deadline for a potential default until the end of June, in keeping with what most analysts seem to think.
Prime Minister Alexis Tsipras has been hitting the media over the weekend, after writing a piece in France’s Le Monde with some trademark anti-austerity rhetoric. Here’s a snippet:
It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people, despite the public admission of the three Institutions that necessary flexibility will be provided in order to respect the popular verdict.
He goes on:
This means the complete abolition of democracy in Europe, the end of every pretext of democracy, and the beginning of disintegration and of an unacceptable division of United Europe.
This means the beginning of the creation of a technocratic monstrosity that will lead to a Europe entirely alien to its founding principles…
For those countries that refuse to bow to the new authority, the solution will be simple: Harsh punishment. Mandatory austerity. And even worse, more restrictions on the movement of capital, disciplinary sanctions, fines and even a parallel currency.
Tsipras is partly playing to the crowd, but those sort of comments certainly don’t make it seem like an agreement is imminent.
Here’s are the payments coming up:
The Greek government is looking to unlock billions of euros in bailout funding, but its creditors demand economic reforms that Tsipras’ Syriza party campaigned against during the recent election.
On Sunday Greek government spokespeople voiced optimism that a deal to ease Greece’s crisis could be done within 48 hours, and there was a 35 minute teleconference between Tsipras, German Chancellor Angela Merkel and French President Francois Hollande.
But the Greek government has repeatedly given extremely optimistic timelines which have turned out to be highly inaccurate, so that’s worth taking with a pinch of salt. For example, today marks two weeks since finance minister Yanis Varoufakis said a deal was a week away, and markets were thrown off last week when a spokesman said a deal was already being drafted (it was not).
The major parts of any deal that there still seem to be division over are labour market reforms and the country’s pension system. According to Greek newspaper Kathimerini the negotiators are also struggling over budget targets. Developments on those fronts might signal a deal is coming — and without them, Greece is heading towards a default.