Eleventh-hour Greece debt talks collapse

Citing his country’s “dignity,” Greek Prime Minister Alexis Tsipras rebuffed International Monetary Fund (IMF) and European Union (EU) requests to slash public pension funds in exchange for further financial assistance to the beleaguered Greek economy.

The EU did cite progress in one key area:  Sources confirmed the Greek government did appear amenable to both the IMF and EU demand Athens produce a budget surplus as a condition for further debt assistance.  Both the EU and IMF have insisted Athens abide by a 1% budget surplus and levy a value-added tax to eliminate any budget deficit.

This is very disappointing and sad. It was a last attempt to bridge our differences but the gap is too large. One can discuss a gap, but this is an ocean,” said a person who was close to the talks.

If default occurs, which is likely at this moment, what remains uncertain is Greece’s membership in the currency bloc of the European Union.  Currently, amidst the economic chaos, in addition to billions owed to the EU, Greece owes the European Central Bank (ECB) 6.7 billion euros.  The ECB-held bonds are set to expire in July.

In asserting its vanity being bruised as more important than conditions set by a benevolent lender, Athens does not invoke a fierce ethical reason they have against necessary cuts to bloated pensions.

Deep inside his Temple of Denial, Mr. Tsipras fears crushing domestic criticism more than he values outside assistance from the EU and IMF, both of which wish for Greek fiscal responsibility.  Mr. Tsipras knows what the chores are like:  It appears as if he would prefer to witness his country go down the pan than reverse forty years of prodigal fiscal management.

Above all, Mr. Tsipras lacks political courage.

 

[bbc.com] [reuters.com]

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