The worldwide Monetary Fund (IMF) said on Monday that Greece missed a new repayment worth of about 456 million euros to it by the day after the country failed to make a 1.5 billion-euro repayment due on June 30.
Unless European creditors are willing to accept a dramatic extension of the grace period for servicing Greece’s entire debt stock to them plus future loans, the alternatives are annual transfers to the Greek budget or “deep upfront haircuts”, the updated debt sustainability study said.
“Greece’s government has shown readiness to carry out reforms”.
It also tested the relationship between Germany – which refused to budge on a strict reform regime for Greece – and France, which insisted everything had to be done to keep Greece in the eurozone.
The poll, which canvassed around 1,000 people, highlighted the high degree of mistrust felt by Germans towards the leftist government of Alexis Tsipras, which since sweeping to power at the start of the year has tried to reverse tough austerity measures they say have devastated the Greek economy.
Berenberg bank economist Holger Schmieding said a temporary euro zone exit for Greece would effectively be a “Grexit” as Athens would have to qualify again to rejoin the currency union and likely face an extremely stern examination in doing so. Greek newspapers on Monday brimmed with references to World War Two and railed against what they see as Berlin’s attempts to humiliate Greece.
Germany’s main opposition has attacked Chancellor Angela Merkel’s government Tuesday for imposing tough conditions on Greece for a third bailout program.
“Only then, we can ask the Bundestag (lower house of parliament) to recall lawmakers for an extraordinary meeting to seek an official mandate to start negotiations”, Seibert added.