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Greece insists “talks on political level” and warns “no payment to IMF, if no deal”

Crucial hours in an unstable environment. The Greek government insists that negotiations continue on political level only and that therefore it was logical that the International Monetary Fund left the negotiations on Thursday. In a non-paper distributed to the media on Friday, the Greek government stresses that “negotiations on technical level have concluded and that they continue on political level.” However, it did not exclude some additional consultations on certain issues.

According to the non-paper, “IMF spokesman Gerry Rice recognized that the Brussels talks were on political level and that the Fund did not want to get involved saying “we are not a political institutions but a technical one.”‘

Greece considers also that the IMF left negotiations in order to increase pressure to Greece and the European Commission with the aim to “implement tough policies in order to secure its money.”

The non-paper attacks the IMF for showing false date on the pensions issue [more on this in a separate post.]

The government reiterates its position that there should not be “just an agreement” with the creditors but a “overall and viable solution with social cohesion.”

The non-paper summarizes the Greek positions as:

1. Low Primary Surplus for 2015 and 2016 in order to halt the reproduction of austerity.

2. No cuts to wages and pensions

3. Debt Restructuring

4. Strong program for growth and investment

Referring to the meeting of PM Alexis Tsipras with German Chancellor Angela Merkel and French President Francois Hollande, the non paper reads that “the government will intensify the negotiations for an agreement.”

In a parallel development, Government sources described as “science fiction scenario” claims by international media that the creditors’ technical teams (Brussels Group) would fly to Athens tonight in order to continue the negotiations. From the very beginning, the Greek government has opposed creditors’ teams to come to Athens and do “inspections in ministries” like the Troika of IMF, EU and ECB during the last 4.5 years. The Brussels Group was established and it convenes in Brussels.

IMF payment vs Wages & Pensions

After the break of negotiations on Thursday, several Greek officials said that there will be no payment to the International Monetary Fund at the end of June if there is no deal with the country’s creditors and consequently no bailout money. The money available at the Greek cash registers will be spent on the wages and pensions.

Defense Minister and leader of SYRIZA’s junior coalition partner Independent Greeks, Panos Kammenos, said on Friday morning that there will be “no payment to creditors, if no deal.”

Kammenos stressed that Greece has been repaying paying its creditors on own resources since August 2014, and that this cannot continue like that. He underlined “it’s either a deal by June 18th or never” but he could not comment what would happen if a deal would be on June 19th.

On June 5th, Greece decided to not to pay the IMF tranche and ‘bundle” the four June payments to the Fund. Payment deadline is 30th June 2015.

Also Minister of State Alekos Flampouraris said that a “deal should come by June 18th, when the Eurogroup convenes.”

No payment to the IMF will trigger a credit event for Greece to whatever the cost for the Greeks, the eurozone stability and the European Union credibility.

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12 comments

  1. 2. No cuts to wages and pensions – how – by new loans? hahahahahaha
    4. Strong program for growth and investment – how – by new loans? hahahahahaha

    Those Greeks – they want to kill us by jokes

  2. Giaourti Giaourtaki

    There are more false numbers and pictures going round. Their parrots still ride the bank-run horse with ATM “traffic jams” of usual end of month pensioners and hoax that ALL money goes abroad – there must be some official numbers by the Bank of Greece; the last statistics indicated that less than 20% left Greece or Greek banks:
    http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_13/02/2015_547264

    • In the way how today banks operate (assets, liabilities, margins etc) even this ~20% of deposit outflow is HUGE. If you don’t believe me, that is also the opinion of Kostas Lapavitsas in his article:
      “The outflow of deposits has assumed mammoth proportions: the banking system is on the brink of collapse. Overdue debt payments are building up. There is a freeze on commercial credit.”

      • 20% of deposit outflow might be (in theory) sustainable in a country with credibility, because banks can sell their bonds and T-bills to foreighn investors and get the liquidity back. But 1. I am not sure if Greek banks have enough debt papers in assets 2. There is low (almost zero) demand for Greek credit risk outside of Greece.
        Yes 20% outflow in this situation means – most of banks are already technically in default.

      • Giaourti Giaourtaki

        But that’s not the point and it’s since 5 years going on like this with all these “German Lies” (Lying the German Volkscharakter?).
        It’s a lie to tell the whole world since months that Greeks bring THEIR money abroad, since November it’s 36 billion and that’s not much more than normal consumerism, if we’d say 6 million people in Greece have a bank account with money on it’s only 100 Euro per month and it’s the money that the family lends to the ones that have nothing and it’s the money of the “too high” pensions because the country is bled out.
        And all this would have happened also with Samaras and he knew about it very well as he refused the harsh measures the Troika asked for in early November.
        So and then come people like you and say that 20% still is a lot and therefore they got the right to lie.