Greece – Stumbling Toward Default
Good Cop Under Fire
On June 5, Greece has to pay €240 million to the IMF. A week later another €270 million are coming due. All in all, Greece has to pay back €1.5 billion in IMF loans over the month of June. All indications are that the Greek government doesn’t even have the €240 m. that are coming due next week. In light of this, its intransigence in the negotiations with the euro-group may be slightly bewildering, but as we have pointed out already when it became clear that Syriza would likely win the Greek parliamentary elections, the situation always was akin to a Mexican standoff.
Image credit: António Jorge Gonçalves
Some in the group leading the negotiations are now accusing the EU Commission and its president Juncker of giving the Greeks “false hope” by making it appear as though they will be bailed out no matter what:
“Some euro zone countries are accusing the European Commission of giving Greece false hope of new loans for less reform effort, but they still want Brussels to find a way to keep a defiant Athens in the euro.
After four months of talks with scant progress, hawkish governments privately blame Commission President Jean-Claude Juncker and Economics Commissioner Pierre Moscovici for muddying their message by playing “good cop”.
Greece is now close to default and still resisting unpopular labor and pension reforms that are conditions for more aid. Some governments believe the creditors would get faster results if the institutions representing them — the Commission, the European Central Bank and the International Monetary Fund — presented a more united tough front.
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