NY Times, June 30 2015 Greece Misses Debt Payment, Deepening a Crisis By JIM YARDLEY and JAMES KANTER
ATHENS — The International Monetary Fund said shortly after midnight Wednesday that Greece had missed a crucial debt payment to the fund. “We have informed our executive board that Greece is now in arrears and can only receive I.M.F. financing once the arrears are cleared,” said Gerry Rice, a spokesman for the fund. Greece is not technically in default, but missing the payment is yet another an unmistakable warning that the country will probably be unable to meet its other obligations in coming weeks, to its bond holders and to the European Central Bank. That may might make the European Central Bank, one of its principal creditors, less willing to continue emergency loans that have been propping up Greek banks for the past several months. By declaring Greece in arrears, the I.M.F. avoided using the term “default.” Credit rating agencies also will not consider Greece to be in default based on missing the I.M.F. payment, for the technical reason that the I.M.F. is not considered a commercial borrower. The weak link in the 19-nation eurozone is struggling to tame its debt. On Tuesday, Greece missed an important payment to the International Monetary Fund. But the ratings agency Standard & Poor’s said in a statement Tuesday that it would designate Greece as being in default if the country cannot make payments to private creditors, like €2 billion in Greek Treasury bills that are due on July 10.With just hours to go before the deadline for the payment, Prime Minister Alexis Tsipras had asked the other nations that use the euro to provide another bailout that would buy Athens time to renegotiate its crippling debt load. Finance ministers of the eurozone countries discussed the proposal on Tuesday night and left open the possibility that Greece could eventually win a new aid package, but dashed any hopes Athens had for immediate action. Chancellor Angela Merkel of Germany had said earlier in the day that no deal with Mr. Tsipras’s government could be negotiated until after a referendum on Sunday in which Greeks will be asked to accept or reject an offer made last week by Greece’s creditors. Mr. Rice confirmed that the I.M.F. had received a request on Tuesday from the Greek authorities for an extension on the repayment. That request, he said, “will go to the I.M.F.’s Executive Board in due course.” Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers, also said on Tuesday night that Greece was effectively in default and could now face even tougher conditions for a new aid package. Mr. Dijsselbloem was speaking to CNBC shortly before midnight Central European Time when Greece formally missed a payment due the International Monetary Fund, and the European part of the country’s current bailout program expired. During a conference call earlier in the evening, the Eurogroup ministers refused a last-minute bid by Mr. Tsipras to extend that program. “I think the fact of the matter is that Greece is in default or will be in default tomorrow morning on the I.M.F. and also, I believe, on a loan to their own central bank,” Mr. Dijsselbloem told CNBC. “But they will be in default, and I don’t think can alter that in the short term.” Any new program for Greece from the European bailout fund, the European Stability Mechanism — something that was requested by Mr. Tsipras on Tuesday — would require a number of procedural steps and raise significant new challenges for Greece. “Any talks about a future program will have to be discussed in the Eurogroup" and "will have to be assessed by the institutions,” Mr. Dijsselbloem said. He was referring to the three institutions — the European Commission, the International Monetary Fund and the European Central Bank — that oversee Greece’s compliance with the terms of the two giant bailouts it has been granted since 2010. Earlier, Alexander Stubb, the Finnish finance minister, wrote on his Twitter account that extending Greece’s current bailout program had not been possible. But Mr. Stubb said the request for what amounts to a third bailout for Greece would be “dealt with through normal procedures,” as was “always” the case after such requests. The developments came after top European Union officials had outlined another offer to Mr. Tsipras on Monday night, and suggested that both sides were interested in defusing a crisis that has left Greece financially crippled and at risk of becoming the first nation to leave the euro currency union. France and the United States, among other nations, have been pressing for a compromise that could avert any risk of Greece’s problems spreading to other countries and reduce the strain on European unity. With the nation’s banks shut down and his government confronting intensifying financial strains, Mr. Tsipras’s office released a statement Tuesday afternoon confirming that the government had proposed a new bailout from a different pot of money than the one drawn on so far. The statement was vague, noting that Greece had applied for a two-year agreement for new loans from the so-called European Stability Mechanism. The statement said that the aim was to help the country meet its debt obligations and that Greece’s intention was to remain in the eurozone. The lack of specificity in the statement made it unclear whether it was just a repackaging of previous requests — already rejected in Brussels, the base of the European Union — or if the prime minister had offered new proposals. Hours earlier, Mr. Tsipras spoke by telephone with Jean-Claude Juncker, president of the European Commission, Mario Draghi, chief of the European Central Bank, and Martin Schulz, president of the European Parliament. And within the Greek government, competing voices were debating how to proceed, analysts said. From a small island to the capital in Athens, here is a glimpse into some of the lives of Greeks as their country struggles to repay billions in debt. “What is certain is that there is a lot of pressure inside the government,” said George Pagoulatos, a political analyst in Athens. “There are some people there who realize the huge risks in the path the country is on.” Tuesday was the final day in which Greece could have made a debt payment of 1.6 billion euros, or about $1.78 billion, to the I.M.F. Failure to make the payment puts Greece in arrears to the I.M.F., but also casts further doubt on its willingness and ability to meet other financial obligations in the coming weeks. Greece’s broader European bailout program, the lifeline that has helped keep the country afloat, also expired at midnight in Brussels. With its banking system shut down, Greece could be forced to abandon the euro as its currency if no deal can be reached for additional financing. Negotiations have been going on for months, as Greece has sought to unlock a frozen €7.2 billion bailout payment and complete a new comprehensive agreement that would include more funding and major debt relief. But the talks broke down last weekend, after Mr. Tsipras unexpectedly announced that a “yes or no” national referendum would be held so that voters could decide whether to accept the terms proposed by creditors, which he found onerous. Mr. Tsipras has called on voters to choose “no” and has denied that the referendum is the equivalent of choosing whether to leave Europe’s currency union, something that most Greeks do not want to do. “From the first moment, we had made it clear that the decision to carry out a referendum is not the end but the continuation of negotiations, with a better outcome for the Greek people,” the statement released by Mr. Tsipras’s office said. “Greece remains at the negotiating table.” Pro-Europe demonstrators massed in Syntagma Square in Athens outside Parliament on Tuesday night despite drizzle, thunder and lightning. As speakers began shouting, “Vote yes to Europe,” the demonstrators shouted and blew whistles. Some waved Greek flags, others red flags bearing the words “YES to Europe. YES to the Euro.” Alexandros Limniatis, 67, a retired worker from the telephone company OTE, said he had been frustrated with the governing Syriza party since it took office this year. But the last straw, he said, came on Monday, the first day of capital controls, when he found himself waiting in a long A.T.M. line to receive his daily cash allotment of €60. “I went home to my grandchildren and I thought, ‘What Greece am I leaving them?’ ” he said, twisting the strand of worry beads he had taken up since the doctor told him to quit smoking. “So I made up my mind to come here to demand hope. Greece in Europe. A European Greece.” Initially, European officials were furious about Mr. Tsipras’s decision to call a referendum, interpreting the move as brinkmanship in the negotiations. But on Monday, several European leaders, notably Mr. Juncker, began openly lobbying Greek voters to choose “yes.” Some analysts said European officials were hoping that a “yes” vote on Sunday would force Mr. Tsipras to resign, a development that would be welcome to the creditors — the European nations that use the euro, the European Central Bank and the I.M.F. — after months of bitter clashes with Greek government officials. In the meantime, some European officials have been signaling that they would like to use the coming days to try to persuade Mr. Tsipras to stop pushing for a “no” vote — an unlikely prospect given the consistent position Mr. Tsipras has taken against the terms offered so far by the creditors. Jim Yardley reported from Athens and James Kanter from Brussels. Melissa Eddy and Alison Smale contributed reporting from Berlin, Niki Kitsantonis, Dimitris Bounias and Anemona Hartocollis from Athens and Alissa J. Rubin from Paris. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
