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June 17, 2015 Comments (0) Views: 915 Economy

Bank of Greece cannot make IMF Payment without Bailout

Greece’s top negotiator has confirmed the country does not have the cash to make the €1.6bn payment due to the International Monetary Fund at the end of the month without a new deal.

And any deal looks as far away as ever, given the opposing positions held by the country and its creditors.

In an interview with Reuters, Euclid Tsakalotos said there was no money to pay the IMF at the moment and echoed prime minister Alexis Tsipras by saying the government was willing to make concessions but pension cuts could not be on the agenda:

“At the moment we haven’t got the money,” he said, adding that Athens was already “squeezing every last bit of drop of liquidity” to service debt so far.

“There is no financing, we haven’t got access to the markets, we haven’t got money that hasn’t been paid since the summer of 2014 so obviously we won’t be able to have the money to pay that [the €1.6bn to the IMF].”

Keeping up Athens’ rhetoric against what it calls unreasonable demands by lenders, he attacked European and IMF lenders for failing to give ground and seeking the bulk of concessions from Athens.

“(Negotiations are) a give and take process, not a convergence on the other side’s initial position,” Tsakalotos said. “They’ve moved a bit on fiscal targets but in most areas, you would be hard pressed to put an A4 paper between what they said in February and what they now say in June. So that seems a bit odd.”

In particular, he ruled out any further cuts to pensions, a stance repeatedly stressed by Prime Minister Alexis Tsipras, whose radical leftist party stormed to power this year on a pledge to end austerity and raise living standards in Greece.

“Pension reform is not a red line for us,” said Tsakalotos. “It seems to us utterly reasonable that pension cuts should not be on the agenda; pension reform should be on the agenda.”

He added that any concessions had to be “economically viable”:

Athens could accept a deal only if it was sustainable and addressed debt, financing and investment issues, said Tsakalotos, the coordinator of the Greek negotiating team.

“If you have that, then the Greek government will sign the deal,” Tsakalotos said. “If it doesn’t have that kind of deal there is no point in signing onto something that you know is going to fail.”

The comments by Tsakalotos – who took a prominent role in the talks with European and IMF lenders in April after Finance Minister Yanis Varoufakis was sidelined – come amid growing fears that cash-strapped Greece is on track to a default at the end of the month that paves the way for a euro exit.

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