World Press View: Broke Greece Facing Full Catastrophe

Zorba couldn’t have said it better: unable to meet critical loan payments in June without more aid, Greece is looking at the full catastrophe, world press reports say.

Some excerpts:

Greece’s Misery Shows Countries Need Bankruptcy Laws

The Guardian – Heather Stewart

Alexis Tsipras, Greece’s combative prime minister, is facing yet another week of fraught negotiations as he and his team struggle to agree a shopping list of economic reforms stringent enough to appease the country’s creditors, but different enough from the grinding austerity of the past five years to satisfy the Greek electorate.

And all the while, bank deposits will leach out of the country, investment plans will remain on hold and consumers hammered by years of austerity will continue living hand to mouth.

Change the actors – and the stakes – and it’s a tired plotline familiar to many governments across the world.

According to Eurodad, the coalition of civil society groups that campaigns on debt, there have been 600 sovereign debt restructurings since the 1950s – with many governments, including Argentina for example, experiencing one wrenching write-off after another.

Many of these countries plunged deeper into recession as a result of the uncertainty and delay inherent in this bewildering process and the punishing austerity policies inflicted on them, with a resulting collapse in investor and consumer confidence.

Sacha Llorenti, the Bolivian ambassador to the UN, is currently touring the world’s capitals trying to change that. “We’re not just talking about a financial issue; it’s an issue related to growth, to development, to social and economic rights,” he says …

Few expect a multilateral system for negotiating sovereign debt workouts to spring up overnight. Llorenti concedes the best he can hope for may be that the UN keeps the issue on the agenda after a fresh vote is held in June.

Ultimately, the reviled IMF is likely to be involved in any workable new approach. But perhaps by channelling the anger of Argentina, Greece, Spain, and scores of others, Llorenti can at least keep the subject alive.

It will be far too late for Greece. Ultimately, almost everyone believes the stricken country will need a renewed debt write-off. Meanwhile, its creditors are following an all-too-familiar playbook.

As Syriza MEP Stelios Kouloglou put it in Brussels: “We are pretending this is a sustainable solution, which it is not: it’s getting worse and worse.” Instead of the hated troika of the IMF, European Central Bank and Brussels, he said, “we’re facing another troika, made up of blackmailing, threatening and ultimatums”.

Greece Urges Creditors Compromise as Payment Looms

Bloomberg – Marcus Bensasson

Greece called on the country’s creditors to compromise on demands to break an impasse over the release of funds for its cash-strapped economy as a deadline neared for payments due next month to the International Monetary Fund.

A day after Prime Minister Alexis Tsipras said Greece can’t absorb any more austerity measures, Finance Minister Yanis Varoufakis said his government has met the euro area and IMF three-quarters of the way so it’s up to creditors to cover the remainder.

Interior Minister Nikos Voutsis, who has no economic decision-making powers, went so far Sunday as to say Greece couldn’t and wouldn’t pay the IMF in June without a deal.

“Greece has made enormous strides reaching a deal, it is now up to the institutions to do their bit,” Varoufakis said Sunday on BBC’s Andrew Marr Show.

“It is not in their interests as our creditors that the cow that produces the milk should be beaten into submission to the extent that the milk will not be enough for them to get their money back.”

German Chancellor Angela Merkel and French President Francois Hollande last week gave Tsipras until the end of May to reach an agreement on its aid program, including economic policy changes demanded by creditors.

As time runs short, the Greek government has to pay monthly salaries and pensions by May 29 and repay about 300 million euros ($330 million) to the IMF a week later.

German Finance Minister Wolfgang Schaeuble, meanwhile, signaled there isn’t much wiggle room after Tsipras’s government committed to policy changes in return for aid in a Feb. 20 euro-area accord.

“That is the condition for completing the current program,” Schaeuble said in a Deutschlandfunk radio interview aired Sunday. “The problems are rooted in Greece. And now Greece does have to fulfill its commitments.”

No Surprise: Greece Can’t Pay IMF, Default Looms

Forbes – Tim Worstall

This isn’t exactly the most surprising news we’re going to be told today but Greece is announcing that it simply won’t be able to meet the upcoming repayments due to the IMF in June.

We’ve all known that at some point this moment would come: without the unlocking of the final tranche of the earlier, seconed, bailout there was no imaginable manner in which Greece could make all the payments due over the summer.

Not unless some miracle happened with tax revenues that is, and as the country’s back in recession that’s not going to happen either.

However, worth noting that this doesn’t actually mean default in June: things move rather more slowly than that …

Here’s the news itself:

Greece cannot make debt repayments to the International Monetary Fund (IMF) next month unless it achieves a deal with creditors, its interior minister said on Sunday, the most explicit remarks yet from Athens about the likelihood of default if talks fail.

Shut out of bond markets and with bailout aid locked, cash-strapped Athens has been scraping state coffers to meet debt obligations and to pay wages and pensions.

After four months of talks with its euro zone partners and the IMF, the country’s leftist-led government is still scrambling for a deal that could release up to 7.2 billion euros ($7.9 billion) in remaining aid to avert bankruptcy.

“The four installments for the IMF in June are 1.6 billion euros ($1.8 billion). This money will not be given and is not there to be given,” Interior Minister Nikos Voutsis told Greek Mega TV’s weekend show.

The only question in minds recently has been when this would happen, not whether.