Tsipras under pressure to cede as Greece misses IMF payment

With Greek society feeling the pain of rationed bank withdrawals and pensions, the government is looking for a way out of economic ruin after a bailout expired and the country joined delinquent Sudan and Zimbabwe in being in arrears to the global lender of last resort.

An 11th-hour request for a new two-year rescue package to tide over a ravaged economy was sternly dismissed by German Chancellor Angela Merkel. With Greece’s stay in the euro club at stake, finance ministers in the 19-nation bloc are scrambling for a solution to pull Greece away from the precipice after more than five years of crisis fighting and two bailouts.

“People are just completely fed up,” said Andrea Montanino, a former International Monetary Fund (IMF) executive board member who now heads the global economics programme at the Atlantic Council in Washington.

While Tsipras has framed the July 5 referendum on budget cuts to be a vote against austerity, economists and policy makers view it as a decision on remaining in the euro. The outcome could determine whether the European Central Bank pulls a financial lifeline keeping the economy on life support.

Merkel said there was “absolutely nothing” to talk about before Sunday.

Still talking?
Nevertheless, there are tentative signs of a thaw as euro- area finance ministers decide to take up Greece’s new aid bid for the second time at 11.30am Brussels time on Wednesday. At first glance, a plan devoid of any economic-reform measures appeared to be a non-starter, according to three officials with knowledge of the first call on the proposal that took place Tuesday.

“The request from Greece appears designed to keep the region somewhat off-balance, and to create the impression that Tsipras is searching for an imaginative solution,” said Malcolm Barr, an economist at JPMorgan Chase Bank in London. “Any deal struck at this stage is going to be on the Eurogroup’s terms.”

In an effort to give talks traction, Greece has agreed to offer more information and said it might change its referendum terms and recommendation, according to an official speaking on condition of anonymity.

‘Little Choice’
“With no fundamental change in the institutions’ offer, Tsipras will have little choice than to maintain his support for a ‘No’ vote, as he announced last Friday,” analysts at Barclays wrote in a note to investors. “This has become even more important, since he publicly declared that he would resign in case of a ‘Yes’ vote. The referendum is thus now about euro membership and Tsipras’s future.”

In Washington, the IMF is digesting what is the biggest missed payment since the institution was created during World War II. Its board will decide whether to grant a Greek request for an extension, something Montanino doesn’t think is likely.

For now, at least, markets suggest investors are confident policy-makers are containing the damage. The euro is trading at $1.114, about the same as before negotiations collapsed on June 26. Bonds rose on Tuesday in Spain, Portugal and Italy, which sold 6.8-billion euros of debt on Tuesday. In Asian trading Wednesday, the MSCI Asia Pacific Index gained for a second day, adding 0.4% at 12.30pm in Hong Kong.

Back in Greece – where citizens are limited to 60 euros a day of withdrawals – the stress of living under financial quarantine is beginning to show. Two pensioners came to blows on a bus returning from the beach to Athens Tuesday morning over who is to blame for the crisis. – Bloomberg.

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


Tension over who’s boss of courts

In a letter, Chief Justice Mogoeng Mogoeng questions whether Justice Minister Ronald Lamola has acted constitutionally

SABC sued over ‘bad’ clip of Ramaphosa

A senior employee at the public broadcaster wants compensation for claims of ‘sabotage’

Soundtrack to a pandemic: Africa’s best coronavirus songs

Drawing on lessons from Ebola, African artists are using music to convey public health messaging. And they are doing it in style

In East Africa, the locusts are coming back for more

In February the devastating locust swarms were the biggest seen in East Africa for 70 years. Now they’re even bigger

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories