Members of Greece’s governing Syriza party and government officials amplified their dissent on Friday over a new bailout plan proposed by Greece’s creditors, hours before Prime Minister Alexis Tsipras was scheduled to address what was likely to be a raucous session of the Greek Parliament.
The turmoil comes a day after Greece said it would not make a scheduled debt repayment to the International Monetary Fund on Friday, a decision that bought the country some time to renegotiate a new debt deal with its international creditors but that raised further uncertainties about whether an agreement could be reached.
Investors responded on Friday by selling Greek stocks and bonds. Some members of the Tsipras government said new elections might be necessary if Greece’s creditors do not show more willingness to compromise.
Even as the prime minister braced for a domestic political uproar on Friday, he stirred international politics by speaking with President Vladimir V. Putin of Russia by telephone to discuss energy and business cooperation before Mr. Tsiprasâs visit to St. Petersburg this month for an economic forum.
Mr. Putin and Mr. Tsipras previously held conversations about a gas pipeline project that Moscow would like to pursue with Greece, but which the United States has urged Athens to resist.
The call came as Greece and its creditors â the I.M.F., the European Central Bank and other eurozone countries â hit a new stalemate over negotiations to provide emergency funds to Athens as its coffers run dry. The timing has raised questions about what Mr. Tsipras intends to achieve, other than sending signals that his country might have other sources of financial aid if he and his European creditors cannot come to terms.
The Greek government made a point of publicizing the Tsipras-Putin call and of describing some of its contents. The two leaders discussed Greeceâs potential participation in a so-called BRICS investment bank, a development bank intended to rival the I.M.F. and the World Bank, whose aim is to be provide investment funds to emerging market countries. BRICS stands for Brazil, Russia, India, China and South Africa.
The Greek government did not disclose further details of the conversation.
The Athens stock market slumped on Friday, falling 5 percent in afternoon trading, pulled down by the shares of big Greek banks. Greek bonds also fell from favor, driving up the yields â a measure of the governmentâs borrowing costs â nearly 3 percentage points, to 24.4 percent on the two-year bond.
European financial markets were down broadly on Friday, partly over the Greece uncertainties.
Athens has proposed bundling the 1.6 billion euros, or $1.8 billion, it owes the I.M.F. in June into a single payment at the end of the month, largely in anticipation that a bailout deal will be reached by then, although the Fitch Ratings Agency warned Friday that the risk that Greece would default altogether on those debts “cannot be discounted.”
A missed payment, Fitch warned, could lead the European Central Bank to restrict the emergency funding it is providing to Greek banks, and could force the government to place limits on how much money depositors can withdraw from the banks.
Syriza lawmakers continued to show their displeasure with the latest proposal from Greece’s creditors setting out the conditions to disburse additional funds to the country’s strapped government. A deputy minister said the government might call for new elections if creditors did not relax their demands. A new opinion poll on Friday showed that four in 10 Greeks supported holding new elections.
The deputy social security minister, Dimitris Stratoulis, a Syriza hard-liner, told Greek television on Friday that the lenders wanted to impose hard measures. “If they do not back down from this package of blackmail,” he said, the government would “have to seek alternative solutions - elections.”
The threat of new elections might be yet another bargaining tactic as Greece negotiates with creditors to try to keep further austerity conditions from any bailout deal. Opinion polls show that if elections were held today, Syriza, which swept to power on pledges to repudiate austerity, would very likely win. A victory would be the second affirmation in less than six months that the Greek electorate backs Mr. Tsipras’s anti-austerity drive.
“If the people reaffirmed the present government, it would be more embarrassing for the Europeans’ pressing for continued - even if watered-down - austerity in Greece,” said Harry Papasotiriou, a political professor at Panteion University in Athens. “It would reaffirm the current Greek government’s mandate,” he said.
Elections might also provide Mr. Tsipras with an opportunity to sweep far-left dissenters from the ranks of Syriza, by not putting them on electoral lists, Mr. Papasotiriou added.
The economy minister, Georgios Stathakis, reiterated on Friday that Greece would not accept the current proposal from its creditors. But he added that the government was prepared to negotiate a compromise.
“We are looking forward to getting a deal as soon as possible,” Mr. Stathakis told BBC Radio.
On Thursday, Greece bought itself some breathing room in those negotiations by deferring a series of debt payments to the I.M.F. until the end of the month, including a loan repayment of â¬300 million, or about $340 million, that was due on Friday. Mr. Stathakis told the BBC that Greece had, in fact, scraped together the money but had decided to take the option - as set down in the I.M.F.’s rule book - of bundling all the payments at the end of the month.
A Greek official, speaking only on the condition of anonymity, as is the government’s policy, said on Friday that the next move was up to the creditors. The official added that an alternate plan proposed by Athens this week reflected months of negotiations between technical teams from Athens and Greece’s creditors.
The creditors’ new proposal contains some compromises, including lower annual targets for primary surpluses - the amount of revenue Greece is required to hold in its coffers after expenses have been paid and before servicing its debt. A lower primary surplus would free up more money for Athens to spend on stimulating its economy.
But the proposal also included calls for further cuts to pension spending, tax increases and other painful measures that the Syriza party has vowed to reject.
That plan returned both sides “to the memorandum program that was rejected at the elections of Jan. 25,” the government official said, referring to the elections in which Mr. Tsipras swept to power amid promises to push back against harsh austerity programs that creditors have required under Greece’s bailouts.
Source: Free News Headlines World Greece’s Governing Party Adds to Pressure From Country’s Creditors