Greece and the economic crisis 2015

NEWS ARCHIVE - June 1 - June 12

June 12, 2015

Greece had better watch out – even the Europhiles are getting fed up - Moneyweek

"There was a very readable if somewhat brutal piece in the FT the other day from economics professor Francesco Giavazzi, headlined: “Greeks chose poverty, let them have their way”.

The short version of his piece was basically: “It’s time to stop indulging Greece – if they want to be a basket case economy for the rest of their lives, that’s fine, let them clear off out of the eurozone”.

It’s nothing we haven’t heard before, though it’s rarely put that bluntly in the FT.

But what did really strike me was his point about the amount of time and energy that’s been wasted on what should fundamentally be a small problem."

"Athens may still be able to use a 30-day grace period allowed under IMF rules before it is formally considered in default. But missing such a payment - after Athens already delayed payments in June to the end of the month - could trigger a chain of unpredictable events in Greece.

The ECB could restrict of halt emergency funding for Greek banks made through the Bank of Greece, probably prompting a run on the lenders and requiring the imposition of capital controls to staunch a huge outflow of euros from the country.

That in turn, would almost certainly precipitate social and political upheaval that could mark the beginning of the end for Tsipras's novice radical leftist-led government.

A default might also open the way for Greece to leave the euro zone - though analysts say it could theoretically continue in the bloc even after defaulting. If the government runs out of money to pay bills and salaries, for example, it could start issuing IOUs that would circulate alongside the euro as a sort of parallel currency."

June 11, 2015

"The surprise IMF announcement came as the European Union told leftist Greek Prime Minister Alexis Tsipras bluntly to stop gambling with his cash-strapped country's future and take crucial decisions needed to avert a devastating default.

A Greek source told Reuters that the entire Greek delegation that had been negotiating a cash-for-reform deal had left Brussels for home on Thursday, citing outstanding disagreements.

...Tsipras renewed a call for a restructuring of Athens' debts as part of any solution. The EU says that can only be considered after a deal to complete the existing bailout is secured.

Tsipras has denounced creditors' demands to scrap an income top-up for the poorest pensioners and to refrain from unilateral moves to reintroduce collective bargaining or raise the minimum wage - policies that are anathema for his Syriza party.

...The Greek leader faces pressure not just from left-wing hardliners but also from Greek voters, most of whom say they want to remain in the euro zone and want him to make concessions for a deal. "

"...The Greek delegation, as agreed, it is ready to intensify its consultations in order to complete the deal soon, even the next 24 hours," he said. In this context, the government spokesman stressed that the government "will continue to work on the remaining issues, such as fiscal and debt sustainability" .

According to reports, the new negotiating team led by Minister of State Nikos Pappas and the Deputy Minister of International Economic Relations remained in Brussels for negotiations.

"We work to bridge the remaining differences," he said...

"To clinch a deal, EU officials said Tsipras's government needed to offer alternative savings and tax measures to replace proposed pension cuts and tax rises he rejected as antisocial, to deliver a modest fiscal surplus before interest payments.

People familiar with the talks said the two sides have come closer to agreeing a primary surplus target but are still wide apart on how to achieve it, with EU and IMF experts doubting that measures touted by Greece can do the job.

But Greek Finance Minister Yanis Varoufakis, sidelined from the talks after infuriating his euro zone counterparts, denied that Athens had agreed to a primary surplus target of 1 percent of gross domestic product sought by the creditors."

Odds are Greece and its international creditors will strike some sort of deal to avoid default before a deadline looming at the end of June.

The bigger question is whether Greece will emerge from a new bailout any better able to grow, and thus support its debts, than it did from prior deals.

Alone among the countries at the center of the eurozone’s sovereign-debt crisis, Greece saw its economy shrink in the first quarter this year. While the bailout negotiations are the latest stumbling block, Greece has lagged behind its peers throughout the crisis.

Blame that not just on the burden of managing its debt, now nearly 180% of gross domestic product, but on a fundamentally different economy: its export sector is small, undiversified and deeply uncompetitive.

...Greece’s competitiveness has long been a problem, but joining the euro made it worse. No longer fearing devaluation, foreigners poured money into Greek debt, driving down interest rates that were once among Europe’s highest. That fueled a borrowing and spending boom, drove up wages, and rendered what manufacturing Greece had even less competitive. Between 2000 and 2008, its per capita output soared 29% and its current account deficit ballooned to more than 14% of GDP.

"The President of the European Union warned that this coming week should prove decisive in Athens' quest to stave off bankruptcy.

Donald Tusk, who chairs meetings of EU leaders, said Thursday that "there is no more time for gambling" and that next week's meeting of the 19 eurozone finance ministers in Luxembourg could be the make-or-break session in sealing Athens' fate.

Cutting through days of dense diplomatic talk about the state of negotiations between struggling Greece and its international creditors, Tusk said it was time for Greek Prime Minister Alexis Tsipras to stop biding for time with unworkable demands.

"The Greek government has to be, I think, a little bit more realistic," Tusk said."

"Standard & Poor’s on Wednesday downgraded Greece’s credit rating one notch further into junk territory, saying it’s likely the country will default on its commercial debt within a year if it can’t strike a deal with its creditors.

Greece has shown it is giving higher priority to its pensions and other domestic spending than making debt payments on time, the rating agency said.

The country has delayed making a June 5 debt payment to the International Monetary Fund and must pay the lending organization 1.6 billion euros by the end of this month.

S&P lowered Greece’s rating to “CCC” from “CCC+” with a “negative” outlook."

June 10, 2015

As Greece lurches toward default, businesses hit the wall - Yahoo

"Paul Arnaoutis, whose firm sells imported medical supplies to Greek hospitals, has been waiting four months to be paid 1.3 million euros the state owes, nearly as much as his company’s entire 2014 sales of 1.7 million.

Until last year, his Chinese suppliers gave credit for 30-60 days. Now they are demanding cash up front because of the risk of doing business with Greece. He fears a doomsday scenario in which the government quits the euro and pays its bills with IOUs, which foreign suppliers will not accept.

"If there is no deal and the government decided to take Greece out of the euro, all Greek importers would be ruined."

Meanwhile, his company is expected to pay tax on 335,000 euros in reported profit from last year, even though it still hasn't received most of the money for the sales: "The profit is virtual".

"...[the Greek government] raised 1.625 billion euros in six-month bills and another 1.3 billion in three-month bills at stable interest. The entirety of offers were accepted, as Greece in June must redeem 5.2 billion euros in treasury bills coming to maturity.

Greece is in a race against time to secure a new loan deal with its EU-IMF creditors by the end of June, before its existing multi-billion bailout expires.

Failure to agree will see Greece fail to get 7.2 billion euros in promised loans and could lead to a debt default and a messy exit from the eurozone. The radical left government in Athens, elected in January on an anti-austerity ticket, has submitted a series of alternative reform proposals to the creditors. But the EU scathingly rejected Athens s new bailout reform plan Wednesday, throwing into doubt a crunch meeting between Greek Prime Minister Alexis Tsipras and the leaders of Germany and France aimed at ending the crisis."

"The head of Greece's biggest port Piraeus will step down, a statement said on Wednesday, after the port was once more named as a target for privatisation in the country's cash-for-reforms negotiations with international creditors.

"...The sale of a majority stake in the port was part of Greece's privatisation plan under its 240 billion euro bailout with the European Union and the International Monetary Fund. Tsipras' government halted the privatisation after it came in power in January but relaunched it last month, as a concession to break a four-month impasse in negotiations."

June 9, 2015

"THE United Nations has been forced to step-up efforts to process thousands of migrants arriving each day on Greek islands popular with European tourists.

The Office of the UN High Commisioner for Refugees spokeswoman Melissa Fleming said the agency will increase personnel on seven Greek islands which have been inundated with refugees arriving in flimsy dinghys in recent months.

More than 7000 people have arrived on the Greek island of Kos alone this year and authorities are struggling to identify and register them, with many forced to live without proper shelter while they wait."

"...a huge gulf remains between creditors and the Greek government, which came to power in January on the back of promises to end five years of painful austerity measures resulting from bailout programmes.

European Commission chief Jean-Claude Juncker is unlikely to be present at Wednesday's meeting, after his own head-to-head with Tsipras last week in Brussels disastrously ended with the Greek premier dismissing Juncker's "absurd proposal".

Juncker told fellow European commissioners on Tuesday that a new Tsipras meeting would be a "waste of time" and that it would be "better to meet with the Latin Americans", an EU source said.

Meanwhile in Athens, Tsipras issued a dire warning that the fate of the eurozone, the central plank of a European project formed in the ashes of World War II, was at stake if the negotiations fail.

"I think that is evident. It would be the beginning of the end for the eurozone," Tsipras told the Italian newspaper Corriere della Sera.

Yet Tsipras is also facing huge pressure at home from the hardline wing of his own Syriza party, which has vowed to resist any attempt to bow to the demands of Greece's creditors."

European Officials Confirm New Proposals From Greece on Resolving Standoff - WSJ

"Greece has submitted new proposals to its creditors, European officials confirmed on Tuesday, in part of an effort to unlock an impasse in negotiations over the country’s bailout program.

“...From a technical point of view, it is still hard” to reach a deal, one of the officials said, pointing out that the proposal still lacked detail on other key areas where the two sides don’t see eye-to-eye, such as labor market overhauls.

European officials said Greece sent a second proposal focusing on its longer-term debt position. According to one of the officials, this second proposal suggests “migrating” Greek debt currently held by eurozone central banks to other parties, including the region’s bailout fund, the European Stability Mechanism."

"After joining the single currency, Greece was flooded with super-cheap credit. Germany’s balance of payments surpluses ballooned from about €50bn when the euro was launched, to about €200bn in 2007, and these were recycled by enthusiastic banks as huge capital flows to the periphery of Europe. Germany built up a huge stock of claims against countries like Greece, on which it was bound to lose one day. The only unknowns were the timing and how messy things would get.

When all those capital flows went into reverse, Greece, because of the euro, could no longer print its own money, nor devalue its currency to boost its exports, nor cut its interest rates, nor launch its own policy of quantitative easing, nor generate higher inflation to reduce the real value of its debt.

Many other countries shifted the burdens of their failed banks on to their governments’ balance sheets. In Greece, this would have increased the dangers of a sovereign default, and so Germany, the UK, the eurozone, and others, got their own banks indirectly bailed out through a loan-based “bailout” of Greece, dumping the problems onto the ECB and the IMF, as a gigantic IOU for the people of Greece."

Greece's and the Eurozone's Best Move -- Adopt Limited Purpose Banking and Then Default - Forbes

"Whether or not Greece’s principal creditors, the Troika — Germany and the other Eurozone countries, the European Central Bank, and the IMF — put yet another fat finger into Greece’s disintegrating fiscal dike, the long-run outcome won’t change. Greece will keep defaulting big time on its official debt. Greece has already defaulted three times in the past five years although these defaults have been described as “bailouts” and “debt relief.” Each bailout comes with conditions, which are routinely ignored, generally out of necessity.

In the Soviet Union workers had a sad joke. “The state pretends to pay us, and we pretend to work.” The sad joke for Greece is, “Our creditors pretend to collect and we pretend to comply.”

Greece has a well-advertised huge public debt totaling 180 percent of GDP. Five years back it was 130 percent of GDP. Whether the 180 percent figure accurately reflects the three recent bailouts is unclear. But Greece’s fiscal problems extend far beyond officially reported government debt.

...The Greeks fully understand their potential to gravely damage EU unity and the global built-to-fail, faith-based banking system. Indeed, this is their main negotiating trump card. But blackmailing their partners and abjuring major fiscal reform (required with or without default) is not in Greece’s long-term interest. Nor is it in the interest of other EU members to perpetually police Greece’s fiscal behavior. What’s needed is a way for Greece to default without bringing down the Greek financial system, let alone overall financial exchange."

June 8, 2015

Greece Lashes Out at Creditor Demands - Bloomberg

"German Chancellor Angela Merkel demanded urgent action from the Greek government on Monday after U.S. President Barack Obama voiced his concerns about the standoff over financial aid at a summit of Group of Seven leaders. European Commission President Jean-Claude Juncker said Greece is not doing enough to ensure it can stay in the euro.

Creditors are growing increasingly exasperated with Greek Prime Minister Alexis Tsipras’s negotiating tactics after he rejected the terms of an aid package again last week. Tsipras’s government then used a technicality to postpone a payment of about 300 million euros ($336 million) to the International Monetary Fund.

Greek Minister of State Nikos Pappas and Deputy Foreign Minister Euclid Tsakalotos met EU Economic Affairs Commissioner Pierre Moscovici in Brussels on Monday, a Greek government official said.

The officials discussed the progress in negotiations with particular emphasis on Greece’s budget shortfall through the end of next year, the official said. The Greek ministers will continue their talks in Brussels on Tuesday."

Why Greece May Be Able to Wait Until Winter for a Third Bailout - NY Times

"If Greece wants to avoid defaulting on its debts, a deal has to be found within days. But back-of-the-envelope calculations by Real Time Brussels show that the Athens government and its creditors may have until the winter to seal a third bailout deal for the country.

Here is how:

Greece’s decision last week to bundle this month’s payments to the International Monetary Fund means its first major redemption, €1.6 billion, is on June 30. That’s why we expect a “staff-level agreement” on budget cuts and overhauls between Athens and the institutions overseeing its bailout by the June 18 Eurogroup at the latest. If both debtor and creditors want to avoid calling the German Bundestag back for an extra session, a deal could be preliminarily approved at a special Eurogroup this weekend. "

"I spent four frantic days in Greece last week. The population watched anxiously as a compromise their far-left leaders were fairly certain they had achieved with Europe, fell apart.

On Friday night, after a lively parliamentary clash, I sat outside a calm, prosperous-looking restaurant in the bohemian Exarcheia district of Athens.

Our night ended suddenly as we watched a group of around 30 men clad in balaclavas turn over bins, set fire to them and systematically distrupt the area.

No police came. No firefighters attended. The petrol smoke drove about 1,000 diners and drinkers and promenaders off two or three intersections’ worth of nightlife. Everybody cursed the anarchists – who are routinely accused also of being as police provocateurs – but shrugged their shoulders.

It was a taste of the new normal in Greece. None of the photographers or cameramen with me even bothered to try to film it, as we all knew our equipment would be immediately destroyed, and that the people complaining about the smoke fumes would probably not lift a finger to help us.

The event won’t make the Greek papers, nor turn up as a briefing for Angela Merkel or Christine Lagarde. But it should. Because it is a perfect example of something the leaders don’t seem even now to understand: Greece is not like Ireland, the poster child for austerity."

June 7, 2015

"No one can be sure how the Greek drama will end, not least because it is no longer clear who, if anyone, is in control. Both sides have been bombarded for months by well-meaning advice to show flexibility and compromise to avoid an economic calamity in Greece and a geopolitical disaster for the eurozone and the world. Instead, positions have hardened to the point where the scope for compromise now looks vanishingly small.

Last week, Greece’s creditors tabled what was effectively a take-it-or-leave-it deal to unlock Greece’s bailout cash before the program expires at the end of the month. Some eurozone officials had been hopeful that Prime Minister Alexis Tsipras would use a speech in the Greek Parliament to signal his willingness to accept the terms on offer. Instead, he denounced the proposal as “absurd” and vowed to reject many of its key demands.

...Athens sees things very differently: It argues that reforms to pensions and salaries required by the IMF would be recessionary since cuts to payouts would reduce domestic demand. It argues that the only way to revive Greece’s economy is via policies to boost demand through lower budget targets and an European Union-funded investment program, even if this means Athens will need to borrow more in the short term.

But the disputes over substance might be bridgeable if the two sides could reach an agreement over debt relief, since the long-term degree of austerity required depends on the overall debt burden. ....No one doubts that Greece’s debts will need to be restructured again."

"Shortly after the International Monetary Fund (IMF) announced that Greece would not be making its $300 million euro repayment tomorrow, Friday, stocks around the globe plummeted to session lows. The S&P 500 extended modest losses to nearly a full percentage point, even with the knowledge that Greece now can bundle its monthly debt into a single payment of $1.5 billion euros on June 30. (Perhaps there is growing concern that the beleaguered euro-zone member will formally default at the end of the month.)

...it is true that Greece is at least as likely to buy more time as it is to become the first nation to leave the euro currency. It’s also true that the initial anxiety of a “Grexit” could subside relatively quickly, as the unknown transitions to a known; a correction could serve up a buying opportunity. Yet those who bought the dot-com dips in 2000 and 2001 found themselves throwing good money after bad; those who followed the likes of bank cheerleader Dick Bove or superstar fund manager Bill Miller into buying “financials” in 2008 learned a harsh lesson about purchasing without a parachute. In sum, Greece is like a subprime mortgage that may or may not become contagious."

"Greece's Prime Minister Alexis Tsipras is expected to meet with German Chancellor Angela Merkel and France's President Franç ois Hollande on the sidelines of a European Union summit next week, a Greek official said.

The three leaders held a conference call late on Saturday, when the meeting was set.

Mr. Tsipras is expected to meet his counterparts during a scheduled gathering of leaders of European Union and Latin American countries that is to take place in Brussels on Wednesday. "

"Leaders of the seven largest industrialized countries arrived for a summit in which their governments aimed to preserve a united front on Russian sanctions and find ways to avoid an escalation of Greece’s debt crisis.

Both the conflict in Ukraine and the standoff between Athens and its creditors—which could lead to a Greek default if negotiators fail to reach a deal to unlock aid for Greece—dominated much of the first day of the summit in the Bavarian Alps.

...The government in Athens has been waiting for months on a €7.2 billion ($8.05 billion) payment from its €245 billion international bailout program. Greece, which is fast running out of cash, likely needs some sort of help this month to repay a set of IMF loans that are falling due. European officials say Athens probably can’t pay the entire amount unless it gets fresh financing in some form.

Washington’s ties with Berlin are playing a central role at the summit as the U.S. is looking to Germany to help rein in Russia’s intervention in Ukraine and to avoid a showdown over Greece’s bailout that U.S. officials fear could damage the world economy. The president praised Ms. Merkel and the U.S. relationship with Germany, calling it “one of the strongest alliances the world has ever known.”

June 6, 2015

Tsipras Says Greece Deal Near Even as He Pans Creditors' Plan - Newsmax

"Greek Prime Minister Alexis Tsipras said the conditions that international creditors are demanding in exchange for more bailout money are “clearly unrealistic.” He also said the nation is getting closer to a deal.

Either way, Greece is hurtling toward a default unless his government seals an agreement or gets another extension before the euro area’s bailout of the Mediterranean nation expires June 30.

Speaking to parliament in Athens late Friday, the embattled Greek leader went on the attack after telling German Chancellor Angela Merkel and French President Francois Hollande on Thursday that a list of proposals set by creditors to unlock bailout funds can’t be the basis for a deal. German and French officials declined to comment on the contents of the call.

The latest proposal was an “unpleasant surprise,” Tsipras told lawmakers, adding that voters are asking the government “not to succumb to the irrational, blackmailing demands of our creditors.”

June 5, 2015

"Prime Minister Alexis Tsipras failed to break the stalemate with creditors at a late-night meeting with European Commission head Jean Claude Juncker and the top official representing Greece's peers in the 19-country euro currency alliance. Officials said the talks will resume in coming days.

On his return to Athens, Tsipras told officials that his government won't accept "extreme proposals."

"Everyone," he said, "must understand that the Greek people have suffered greatly over the last five years, and some people must stop playing games at their expense."

"Economist Holger Schmieding at Berenberg Bank in London predicts a period of "disorientation" while investors figure out what the impact will be. The first word of an impending departure would likely roil markets, especially in Europe. Stocks and the euro might fall. And borrowing costs for other eurozone governments with shaky public finances, such as Italy and Portugal, might rise, at least temporarily.

Yet Schmieding foresees no serious long-term damage and dismisses talk of a comparison to Lehman's collapse. The risk for Europe as a whole, he says, "is very, very small — virtually zero."

The key difference between Lehman and Greece centers on the element of surprise, according to Schmieding: Lehman's collapse was unexpected and spread panic across markets as investors wondered which bank would go under next."

"...Some people will say, “Andreas Papandreou did the same thing.” That may be so, save three important differences. The late Socialist leader was unchallenged inside PASOK and he did not use the party as an excuse as to what he could or could not do. He was able to close out the game when it mattered. He was also a good judge of people and circumstances internationally. Tsipras is better than he was one or two years ago, but he is still seduced by people with pie-in-the-sky ideas. Even if some of the poor handling can be blamed on his lack of experience, it’s hard to believe that he does not have a circle of reliable advisers who can warn him against actions and words which are bound to raise eyebrows in Berlin, Paris or Washington.

This is a very crucial moment. Fairly or not, most of Europe’s establishment has written Greece off. Our empty geopolitical threats have backfired. As international relations expert at Oxford University Kalypso Nicolaidis was saying yesterday, it’s better if others – not you – warn against the risk of your country falling apart..."

"Greece is to take the drastic step of skipping a €300m payment to the International Monetary Fund on Friday, invoking an obscure mechanism in abeyance since the 1970s to bundle all debts due in June and pay them at the end of the month.

It is the first time that a developed country has ever missed a payment to the IMF since the creation of the Bretton Woods institutions at the end of the Second World War.

The news broke after the Athens stock exchange had closed but a bloodbath is feared when the bourse opens on Friday. Yields on two-year Greek bonds spiked 63 basis points to 21.8pc amid mounting fears of a deposit run on Greek banks and the imposition of capital controls as soon as this weekend."

June 4, 2015

"Speaking to CNN after hours of talks Wednesday between Greece and its creditors failed to produce a breakthrough, Merkel said a solution to the current crisis needed "big efforts" by both sides.

But she made clear that Greece should look to the example of other countries in the eurozone -- such as Ireland -- that had implemented painful changes to their economies in response to the financial crisis.

"They went through such a program and now have the best growth in the eurozone," she said. "

"Mr. Tsipras will submit a counter offer to his country’s creditors, including the rest of the eurozone and the International Monetary Fund, two officials said. They spoke after the Greek prime minister held late-night talks with European Commission President Jean-Claude Juncker and Jeroen Dijsselbloem, the Dutch finance minister who represents the currency union’s national governments in the talks.

The Greek leader is now scheduled to meet with Mr. Juncker again “in coming days,” Mr. Juncker’s spokesman Margaritis Schinas said. “They agreed to meet again, intense work will continue.”

Officials warned that Greece and its creditors still have issues to resolve before a deal is struck.

“Proposals and counter proposals are part of the combative negotiations that are ongoing,” one official said.

“Yesterday we saw some convergence in a few points, but not on others. It will be difficult,” the official added."

"Mario Draghi, the president of the European Central Bank, said that “social fairness” — a new phrase from him — should be an element in the program that Greece will need to accept in order to receive more financial support from the rest of the eurozone. And he indicated a willingness to slightly ease the fiscal targets that Greece has been asked to meet.

His words suggest that one very influential eurozone leader is willing to make some concessions to Athens’s demands for a less painful economic program — although probably nowhere near as painless as the leftist Syriza government would like. It remains an open question whether Greece and the creditors can bridge their huge differences and make a deal before the country runs out of money, perhaps within weeks, which could lead to its exit from the eurozone.

...Mr. Draghi took part in a meeting about Greece late Monday in Berlin that also included Angela Merkel, the German chancellor; Christine Lagarde, the managing director of the International Monetary Fund; and François Hollande, the president of France. Mr. Draghi said on Wednesday that he would not take part in further discussions in Brussels.

The European Central Bank also provides emergency credit to Greek banks. Without that cash, the Greek financial system probably would have collapsed long ago.

Mr. Draghi couched his remarks on Wednesday in tough language about the need for Greece to stick to conditions imposed by creditors. And he faulted Greek leaders for failing to put into effect terms they had agreed to during five years of bailout programs."

June 3, 2015

"As Greek Prime Minister Alexis Tsipras and European Commission chief Jean-Claude Junker prepare for last-minute crisis talks, European leaders have finally caved on one of the most crucial sticking points in crisis talks, after it was reported Tsipras, Angela Merkel and Francois Hollande had reached an agreement on cutting targets for Greece's primary budget surplus in the latest draft of a deal.

...Earlier, the FT had reported that sources drafting the text said expectations for this year's primary budget surplus had been cut to one per cent from three per cent, rising to two per cent next year, three per cent in 2017 and 3.5 per cent in 2018.

Greece desperately needs to agree austerity measures with its lenders to unlock a €7.2bn tranche of bailout money.

Despite Tsipras meeting Juncker, there were still jitters over whether a deal can be reached. Nikos Filis, a spokesman, said the country would delay the payment of €300m (£218m) to the International Monetary Fund (IMF) if a deal still looked a long way off by the time it becomes due on Friday."

"Mr. Tsipras’ visit comes after Greece’s international creditors agreed Tuesday on the outlines of a bailout deal they would present to Athens, a move aimed at breaking a monthslong stalemate in negotiations between technical experts representing both sides.

“Intensive work continues at all levels toward an agreement to successfully conclude the current adjustment program,” said European Commission spokesman Margaritis Schinas.

“This is a first discussion, not a concluding one,” he said.

In a televised address before leaving Athens, Mr. Tsipras said his government hadn’t received the creditors’ proposal, and that he is visiting Brussels to discuss a plan by the Greek side.

...Members of his Syriza party are already organizing a meeting for Thursday to discuss the deal. "

"With time rapidly running out, and looking to draw a line under months of acrimonious negotiations, Greece's creditors have effectively come up with a take-it-or-leave-it offer.

Details of the package have yet to emerge, but it will almost certainly contain elements that will be hard to accept for Tsipras and his leftist Syriza party, which was elected in January promising to end years of austerity for battered Greece.

...It is due to pay back the IMF 300 million euros ($335 million) of loans on June 5, but the spokesman for Syriza's lawmakers said on Wednesday it would miss this deadline if there was no prospect of an aid-for-reforms deal with its creditors.

"If there is no prospect of a deal by Friday or Monday, I don't know by when exactly, we will not pay," Nikos Filis told Mega TV on Wednesday."

June 2, 2015

"Eurozone governments and the IMF have agreed to press Greece for far-reaching economic overhauls, while the IMF has softened its insistence that Europe offer explicit commitments to relieve some of Greece’s debt burden, the people said.

Greece’s high debt remains a contentious issue in the background between the IMF and European lenders, led by Germany, but isn't holding up the creditors’ proposal to Greece. IMF head Christine Lagarde warned at the Berlin meeting that debt restructuring will become necessary if Greece doesn’t enact thorough economic overhauls that improve its budget balance and lift its growth trajectory, these people said.

...Syriza’s parliamentary spokesman Nikos Filis told local ANT1 TV that Greece won't accept an ultimatum, and that Greece’s government cannot sign an agreement that is incompatible with the party’s antiausterity program.

...Mr. Filis said that if 12 or more Syriza lawmakers vote against the proposed deal, then the country should go to general elections. The Syriza-led government holds a majority of 12 seats in Greece’s parliament. "

"Jeroen Dijsselbloem, head of the eurozone's group of finance ministers, said that while there had been progress in recent days, it was "still not sufficient" to "meet the economic conditions" of an agreement.

“As long as it doesn’t meet economic conditions, we can’t come to an agreement," he told Dutch financial news station RTLZ. “It’s not right to think that we can meet half way".

...Pierre Moscovici, European Commissioner for Economic and Financial Affairs, said talks were "bearing fruit". "The discussions are fruitful, they are bearing fruit, there is real progress with a better understanding by both the Greek government and its creditors,” Mr Moscovici told French radio.

However, he conceded that efforts still had to be made "on both sides”. “We are starting to work in depth on pensions. The Greek government has made some first proposals and the pros and cons are being considered,” he said, adding that negotiations continued on VAT reform.

Pensions reform have long been considered one of the main stumbling blocks in negotiations between Greece and its creditors. Any movement on this issue would be seen as a significant breakthrough."

"US stocks opened lower Tuesday, following European equity markets downward as worries about a possible Greek debt default hovered over the eurozone.

... Greece said it submitted a "realistic" reform plan to win release of emergency funds. But official creditors in Europe and at the International Monetary Fund have been pushing for tougher reforms than those accepted by Greece's anti-austerity government."

"This episode of the Greek crisis will probably end with another helping of EU fudge, writes our economics editor, Larry Elliott.

After all, a Grexit is too alarming and Athens remains unwilling to cave in:

Greece does not want to leave the euro. Merkel does not want to be the politician held responsible for derailing the European project. So there is a temptation to do what Europe has done throughout its six-year sovereign debt crisis: play for time.

This would involve Greece’s creditors providing bridging finance that would allow Tsipras to meet the series of debt repayments due this summer and for a referendum to be held on whether the Greeks believe yet more austerity is a price worth paying for staying in the euro.

Athens would give a solemn commitment to step up the pace of economic reform; the troika would say that any backsliding will result in the money being cut off... "

A video report accompanied this page

"Dutch Finance Minister Jeroen Dijsselbloem, who leads the euro-area finance ministers’ group, says creditors are still far from a deal with Greece. Bloomberg's Erik Schatzker reports on “Market Makers.”

June 1, 2015

"The clock is ticking -- the bailout expires at the end of June, after which Greece would be on its own financially. A last minute deal is always possible, despite the apparent gulf between the two sides, but economists say the risk of failure is rising.

Athens only managed to stay afloat last month by raiding its emergency reserves, and forcing local government and other public bodies to hand over cash.

...Greece needs to pay the IMF nearly 1.6 billion euros ($1.75 billion) in June -- starting with 300 million on Friday. It may be allowed to delay this week's payment until later in the month. But state pensions and salaries worth about 1.7 billion euros also fall due towards the end of June. The Greek government has said that it would prioritize pensions over payments to the IMF.

...Greece might be able to cling on to the euro even amid this horror scenario. It could issue IOUs -- effectively a parallel currency to the euro -- to pay wages and other domestic commitments, allowing the government to use scarce euros to meets its international interest payments."

A video report also accompanied this article

"Another crucial week for Greece - on Friday, it must pay the International Monetary Fund at least a quarter of the 1.5bn euros it has to pay in June. However, the total this month Greece actually needs to pay in terms of bills is 6.7bn euros. The rest - 5.2bn euros - is short term treasury bills.

The assumption is these will be rolled over. If not, that would be a big disaster and there are more payments to come in July and August - at least another 10bn euros to the IMF, the ECB and short term bills."

"The IMF has said Greece can bundle the €1.6 billion ($1.75 billion, £1.15 billion) in payments it owes in June into one (it's currently spread across four instalments). That buys Greece some time, but it doesn't make the actual payments any easier. That would push the hard deadline for a potential default to the end of June, in keeping with what most analysts seem to think.

The Greek government is looking to unlock billions of euros in bailout funding, but its creditors demand economic reforms that Tsipras' Syriza party campaigned against during the recent election.

On Sunday, Greek government representatives expressed optimism that a deal to ease Greece's crisis could be done within 48 hours, and there was a 35-minute teleconference between Tsipras, German Chancellor Angela Merkel, and French President Francois Hollande."

"Greece’s chances of striking a deal to access a much-needed €7.2bn in rescue aid looked even bleaker on Sunday after Alexis Tsipras, prime minister, accused bailout monitors of making “absurd” demands and seeking to impose “harsh punishment” on Athens.

Mr Tsipras’s accusations, made in Le Monde newspaper, came only days after his government claimed an agreement was imminent. They have increased the sense of chaos around negotiations in the week many believe a deal is needed to avoid a Greek default.

On Friday, Athens is scheduled to make a €300m loan repayment to the International Monetary Fund that is being closely watched by creditors after some Greek ministers hinted that it might not be met without bailout aid. A further €1.2bn of IMF payments fall due over the subsequent two weeks."

"In the wake of Elena Panaritis’ withdrawal, the Greek government has issued one of its famous non-papers distancing finance minister Yanis Varoufakis from her appointment to the International Monetary Fund in the first place.

Helena Smith, our correspondent in Athens, reports.

“The choice of Elena Panaritis, as the country’s IMF representative, was made collectively,” the paper stated. “The view that has been heard that Yanis Varoufakis appointed her does not correspond to reality.”

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