Syriza government asks the people to participate in the referendum

Greek Prime Minister Alexis Tsipras, is reconsidering the last offer made by the President of the European Commission, Jean-Claude Juncker, to resolve the debt crisis, according to reports by the Greek media. Although it would mean a step back in rejecting perpetual austerity and misery for the Greek people, Tsipras has been pressured by members of his own government to take another look at the latest EU proposal.

According to the sources from the office of the Greek Prime Minister, the government has already informed the European Commission that it is reconsidering the proposal, of which the details are not known. Should Tspras decide to ignore the Greek people, which it seems he has been doing for the last few weeks, he would have to submit a written acceptance of the version presented to him by creditors last Sunday.

Groups of thousands of Greek citizens have already begun campaigning for voting NO on the European proposal, so if Tsipras changes his mind, he will have to address the Greeks to explain why he did so and to try to convince them to vote YES on Sunday.

Meanwhile, the Greek Prime Minister has begun a series of consultations with European leaders and from the European Commission to seek a solution give the current deadlock in negotiations.

The head of the Greek Government maintains an “open line” to the ECm while government sources say that today may be a “very interesting” day speak. Tsipras has canceled a meeting with employers this morning and the government spokesman, Gavriil Sakelaridis, also cancelled a press conference scheduled for noon.

According to reports frm the Financial Times, Tsipras’s government is preparing a new proposal that will be delivered throughout the day to European institutions as na alternative should he decide to not accept the term of Juncker’s proposal.

In the latest proposal, presented by Juncker on Sunday was never part of the final negotiations, according to Greek government represenatives. Some of the most difficult points of the European proposal include a VAT tax rate on hotel of 13% instead of 23%. Sunday’s proposal seemed to be a final one, a bluff from Juncker, a take it or leave it ultimatum. It was precisely the lack of flexibilit in that proposal that prompted Tsipras to call for a referendum.

According to reports by local media that have not yet been officially confirmed, Juncker called Tsipras last night and asked him to accept his latest offer, which would explain why Tsipras began to consider Juncker’s proposal again. Juncker asked of Tsipras that if he accepted the proposal from the Europeans, to send a letter to him, Angela Merkel, Francois Hollande and to the Eurogroup requesting an emergency meeting of the eurozone.

Tsipras would also have to make official his recommendation to vote for the YES in the referendum next Sunday, and advocate the acceptance of the agreement, while asking the population to support it.

In exchange, the compromise text would involve a clear reference to the terms of the second bailout signed in November 2012, in which the partners would analyze possibilities for debt relief if Greece fulfilled a number of conditions.

These conditions were reaching a primary surplus, meet the conditions for the rescue and having an unsustainable, unpayable debt. That is, Greece would agree to live forever in debt and to continue paying interests on the debt, without ever being able to pay it off.

Meanwhile, Greek Finance Minister Yanis Varufakis, said today that Greece will not pay the International Monetary Fund, a total of 1,6 billion euros that expires at midnight. Leaving the ministry, Varufakis was asked by reporters about whether Greece would make the payment, to which he replied with a clear “no”.

Varufakis thereby left clear what was an open secret and which Tsipras had indirectly advanced yesterday in an interview with public television. “We will pay if we achieve a sustainable agreement,” Tsipras said, thereby leaving clear that the disbursement will not occur.

Other Greek officials have expressed the same type of discourse. Deputy Finance Minister Valavani Nadia, told state television that the payment would be possible only if Greece were able to obtain the 1,8 billion euros of profits generated from Greek bonds in 2014 which are in the hands of the European Central Bank.

Greece has until 23:00 GMT to make the payment, which includes three payments from June; or choose to default on its debt with the IMF.

However, the default situation is not automatic, since, as recalled today by Valavani, its passage can last as much as one month. “Greece should pay the IMF this afternoon. I do not know if it will or not, but if it does not happen, it would have great consequences,” said French Finance Minister Michel Sapin.

After confirming that Greece has not paid and until that time it is expected that the IMF’s managing director, Christine Lagarde, will report to the Executive Council of the organization, possibly  the same day.

It is not clear what will come to Greece after the default, although there may be more the one option for Greece to seek the capital investment it needs. Tsipras has had multiple conversations with the Russian presidente, Vladimir Putin, and today, it has been rumored that Greece may join the BRICS and its New Development Bank.

Leave a Reply

Your email address will not be published. Required fields are marked *