Debt ultimatum to Greece will meet resistance
If Athens takes the debt issue to the people, a bridging loan may be needed, since repayments fall due in the interim
We do not accept ultimatums or succumb to blackmail, Deputy Prime Minister Yiannis Daragasakis said today. An unscheduled and unprecedented meeting in Berlin last night of the German chancellor, French president, European Commission president, ECB president and IMF managing director decided to put a list of reforms to the Greek government, after insufficient progress had been made in technical-level talks. However, Athens had in the meantime put forward its own proposals for pension reform, bolstering its position that it has been cooperating in good faith. A Greek junior minister said a bad proposal from the internationals would not be tabled to parliament and elections would have to be held.
Our judgement
The approach of the June 5 deadline for an IMF loan repayment is concentrating minds on both sides -- the Greek government and its EU/ECB/IMF interlocutors. Any suggestion that its international creditors are dictating terms to Greece will produce a backlash. Early elections may ensue, or the government may put the issue to a referendum.
See GREECE/INT: IMF may stop contributing bailout funds - May 7, 2015.