Europe Warns Greece Over Deal As IMF Walks Away

GreeceGreece hopes to clinch a deal with its lenders at a meeting of eurozone finance ministers on June 18, the state minister said on Friday, as time runs short for the country to stave off default at the end of the month.

The statement by Alekos Flabouraris came a day after the International Monetary Fund walked away from negotiations in Brussels, citing major differences, and a top EU leader bluntly told Athens to stop “gambling” with its future.

A Greek source said that the entire Greek delegation that had been negotiating a cash-for-reform deal had also left for home on Thursday, citing continuing disagreements.

“There are major differences between us in most key areas,” said the IMF’s spokesman, Gerry Rice, as the fund’s lead negotiators returned from Brussels to Washington. “There has been no progress in narrowing these differences recently and thus we are well away from an agreement.”

Donald Tusk the European Council president, who had a private meeting with the Greek Prime Minister Alexis Tsipras on 11 June, also issued what amounted to an ultimatum. “We need decisions, not negotiations, now,” he said. “It’s my opinion that the Greek Government has to be, I think, a little more realistic. There’s no more space for gambling, there’s no more time for gambling. The day is coming, I’m afraid, where someone says the game is over”.

Jens Weidmann, the president of Germany’s Bundesbank, added to the pressure, saying that Greece’s “time was running out” to secure an agreement and that “the risk of insolvency is increasing by the day”.

“I hope it (a deal) will come very soon, on June 18, when the Eurogroup takes place,” Flabouraris, a close aid to Greek Prime Minister Alexis Tsipras, told state television ERT.

Greece needs a deal to unlock aid before the end of the month when it is otherwise set to default on a 1.6 billion euro ($1.8 billion) repayment to the IMF. That could trigger capital controls and possibly push Greece out of the euro zone, with unpredictable consequences for the European economy.

Major sticking points remain. Athens has balked at measures such as curbing pension benefits and raising the value added tax, and has pressed its lenders for more help to attempt to reduce its debt burden.

“Whatever we do, whatever measure we take, no matter what we do, if we don’t start addressing the debt issue, there is no chance that the Greece economy kickstarts,” said Flabouraris. “And if the Greek economy doesn’t kickstart, we cannot deal with unemployment, shops will close down.”

Asked about the upcoming IMF payment at the end of the month, Deputy Finance Minister Dimitris Mardas told SKAI radio:

“It is our job to be paying our obligations at the time when they are due.”


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