Syriza Split

Mixed Signals from a Divided Athens

Syriza split AFP
Yanis Varoufakis (l) and Alexis Tsipras (r).
  • Why it matters

    Why it matters

    Greece is near breaking point and will need to conclude a deal rapidly to avoid default in June.

  • Facts


    • Greece is due to pay back the IMF €1.6 billion in June.
    • Two senior ministers have said that the country cannot afford the first payment of €300 million on June 5.
    • Talks resume in Brussels on Tuesday with lenders to reach a deal.
  • Audio


  • Pdf

The Greek debt drama continues, with contradictory statements coming out of Athens as to whether the country can keep up its loan repayments.

On Monday, the government spokesman sought to counter a statement by the interior minister, Nikos Voutsis, who said on Sunday that the country “can’t and won’t” make the next payment to the International Monetary Fund in June.

However, spokesman Gabriel Sakellaridis insisted that Athens intends to make its payments. “Based on the liquidity problems that we have, there is an imperative need for us and the euro zone to reach a deal as soon as possible,” Mr. Sakellaridis said.

“We want to be consistent with our obligations and so we are striving for a deal so the economy can get some relief,” he said.

Yet, shortly before Mr. Sakelladris spoke, the country’s deputy foreign minister, Nikos Chountis, told Greek TV: “We haven’t got the money. We won’t pay. It’s that simple.”

The next €300 million payment is due on June 5, the first installment of the €1.6 billion Greece owes the IMF in June alone.

The country desperately needs a deal with its creditors, the IMF, the European Central Bank and the European Union. They have contributed to the two bailouts, amounting to €240 billion, that Greece has required since 2010 to keep afloat.

The election of the far-left Syriza party in January, which came to power promising to end austerity, has prompted the trio of lenders to refuse to disburse the remaining €7.2 billion in the fund.

Klaus Regling, the head of the European Stability Mechanism, the bailout fund set up to aid the struggling euro-zone countries, said on Tuesday that time was running out for Greece.

“There is little time left,” Mr. Regling told Bild, Germany’s best-selling newspaper. “Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that.”

Reaching a deal with creditors is being made more difficult by senior members of the Greek government who oppose giving up the “red lines” that Athens has tried to stick to in the talks, such as refusing to cut pensions and public sector wages.

Furthermore, the contradictory statements emanating from the Greek government point to deep divisions within the ruling Syriza party, with hardliners pushing to end payments to creditors.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.