Debt dispute with greece: don’t save, don’t pay?

Greece has his back to the wall – but Prime Minister Tsipras seems to be opening the gaps between Athens and the lenders even further: according to media reports, he no longer wants to commit to repaying the next repayment installment to the International Monetary Fund (IMF).

According to Greek media reports, Greece’s Prime Minister Alexis Tsipras reserves the option not to pay the EUR 1.6 billion installment due to the IMF on June 30 if an agreement with the creditors is not reached by the end of the month. He said that at a meeting to the heads of the two small pro-European opposition parties To Potami and Pasok. At the meeting, both parties assured the government that they would support the negotiations.

The Greek government has not yet commented on the reports. Tsipras, however, spoke in front of members of his party about his approach – and in it he repeated the accusation against the euro partners, the EU Commission and the IMF that they wanted to demonstrate their power in the negotiations and humiliate Greece. However, he does not want to give in, said Tsipras in parliament:

"We have received a mandate from the Greek people to end the austerity policy. To achieve this, we need to reach an agreement that distributes the burden equally and does not burden workers and pensioners."

The government is ready to return to the negotiating table with the creditors. But the country has nothing more to give. It has reached the limits of what it can take.

New mediation attempt on Wednesday

The second bailout package for Greece, which still contains 7.2 billion euros, expires on June 30th. The creditors only want to pay out the money if Athens promises to reform. In addition, Greece can possibly hope for a further eleven billion euros from this pot, which was earmarked for bank aid, but was not called. However, the money will only be available if Greece promises and implements a bundle of reforms.

But this is exactly what Athens argues with the so-called institutions in Brussels. Before the meeting of the Eurogroup on Thursday, Austria’s Chancellor Werner Faymann wants to try to mediate. The aim of the meeting with Tsipras on Wednesday in Athens was to avert the Grexit, i.e. Greece’s exit from the euro zone, said Faymann. A difficult task, because Greece’s finance minister Yanis Varoufakis has already announced that he will not submit a new list of reforms to the Eurogroup. He told the "Bild" newspaper that the Eurogroup was not the forum for proposals that had not previously been discussed at the lower negotiating level.

According to media reports, the EU is also considering a special weekend summit. Everything depends "on the results of the Eurogroup". "A summit cannot be completely ruled out," said one responsible. Whether this will only affect the euro countries or all 28 EU member states is still unclear.

Eurogroup discusses Grexit scenarios

In parallel to their efforts to keep Greece in the euro zone, the EU states are also discussing the consequences of a failure of the negotiations. The Eurogroup is discussing the "possible effects of less favorable scenarios," said EU Commission Vice-President Valdis Dombrovskis.

Chancellor Angela Merkel is still hopeful of finding a solution to the debt dispute. She said she wanted to do everything possible to keep Greece in the euro zone. "I am concentrating all my energy on helping the three institutions to find a solution with Greece," said Merkel after a meeting with Luxembourg Prime Minister Xavier Bettel. This expressed itself less diplomatically:

"There is still talk. But something has to come out. If you just get together and it’s a nice meeting, that’s not enough at the moment."

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