“Blackmailing” has turned into major strategic tool among EU leaders and IMF technocrats and the ‘shock’ referendum proposal of Greek PM George Papandreou seems to backfire. It blocks the release of the six aid tranche of 8 billion euro for the payment of pensions and wages.
CANNES, France(Reuters) – The European Union and IMF will not release an 8 billion euro payment to Greece until after the country has held a referendum on the EU’s latest bailout program, a source on the IMF board and an EU source said on Wednesday.Euro zone leaders last week signed off on the sixth tranche from a 110-billion-euro package agreed for Athens last year, but the sources said the payment was on hold and would not be paid until after the referendum. Without the payment, Greece could face bankruptcy.
“The board would not want to give money to Greece and then wonder what will happen,” the IMF board source said. “The board will want comfort that Greece will fulfill its commitments and right now Papandreou is unable to give that.”
The EU source said EU countries had aligned themselves with the IMF and would only make the payment once the international lender had clarity from Greece on its commitments.
“The sooner Greece holds the referendum, the sooner the sixth tranche will be paid. But right now, it isn’t going to be paid,” the EU source said. (Reuters)
However Dow Jones reports that Greece does not urgently need the 6th aid tranche until mid-December.
Greece doesn’t need urgent bailout payments now and won’t require a sixth tranche until mid-December, a German finance ministry spokesman said Wednesday.
In May last year, Greece narrowly avoided default on its debt payments with the help of a EUR110 billion bailout from its fellow euro-zone partners and the International Monetary Fund in exchange for steps to cut its budget deficit and enact economic reforms. Late last month, euro-zone finance ministers approved their portion of the next EUR8 billion aid tranche promised to Greece under last year’s bailout, but a decision by the IMF is still pending as it is waiting for a new European aid package for Greece to be approved before releasing those funds.
“From all that we hear out of Greece, there is no acute payment need until around mid-December,” Martin Kotthaus told a regular government press conference. That gives time “to take a concrete look as to how we’re proceeding.”
He also said the EUR8 billion tranche from the first bailout package, which had been scheduled for payment in November, hasn’t yet been paid. Germany’s share in that portion is around EUR1.7 billion.
A senior Greek government official told Dow Jones Newswires Wednesday the government has sufficient cash to cover its operating needs until December.(WallStreetJournal)
Depending on EU/IM pressures on Greece’ Dream Team, PM Papandreou and FinMIn Venizelos might return to Athens on different airplanes…..
i do not agree with a referendum at this time. it should have been done at the start not now that we are literally over the fire and the options are stay and cook or jump in the fire. but it is amazing how all these “democratic” institutions and goverments dont want greece to have a democratic procedure. i think they had got used to the greek politicians saying yes to everything with some resistance but not enough to worry them and suddenly its as if their favourite pet turned and bit them. and they are saying no more doggy biscuits for you go to your kennel and think about what you have done. or we finally see that its all about the markets and not about democracy. as it is i think the expression is “its a shitstorm”
yes, it’s all about Money, Money, Money
The dream team isn’t fitting together in Papandreous F 16.
The Greeks are not asking for a 100% haircut on all loans, including those held by the ECB and IMF, are they?
no, 100% – 100% haircut is official bankruptcy
We will know if this 6th tranche comes after December 4, when the Greeks can choose between staying in the Eurozone or not. Well at least as far as Merkel and Sarkozy did put it.
One point: I remember that Greece had money until October. Then there was enough untill the 3th week of November. Now we are told there is enough untill beginning of December… “Ipargoun lepta” all over again??? Think ‘small’ discrepancies like this are way to symptomatic for the Greek state.
they keep collecting the emergency taxes, so they have liquidity, there won’t be any referendum, GAP is finished.
Their reaction makes it clear who benefits from the bail-out.
I hope Greece votes against the bail-out.
Please publish any research you find on the odds of the referendum pass/fail.