Greek PM defends “emergency” plan for potential euro zone exit

An IMF official said the Fund would approve new loans for Greece only if Athens reached a deal with European governments that would ensure it can pay its debts, and there was “no expectation” that talks over the next couple of weeks would get to the point where the Fund could approve a new programme.

“There was convergence on some issues, less on others”, he said. Without them, the latest bailout agreement would face the same fate as the previous two, which bought some time for Greece and its euro-zone partners but at a high cost.

Many far-left and more radical members of Syriza, and many members of the Greek public, oppose a third bailout for Greece because of the years more austerity it will entail.

Fridays meetings came hours after Tsipras defeated a bid by dissenters in his left-wing Syriza party to push for an end to bailout negotiations and seek a return to the old national currency, the drachma.

The envoys are to meet Finance Minister Euclid Tsakalotos following talks during the week in Athens between lower-level officials on reforming the tax system and labor market regulations.

Greek Prime Minister Alexis Tsipras holds a bottle of water as he…

On Thursday, Tsipras scrabbled to stop his party from a fatal split, telling an emergency central committee of his party that the party faced a “big dilemma” – to “succumb or go ahead with a compromise we were forced into”, Reuters reported.

Dissenters had sought a convention earlier, urgent the federal government to desert the negotiations.

In two successive votes in parliament this month, almost a fourth of Syriza’s lawmakers refused to support new austerity measures demanded by creditors before a third bailout deal worth an estimated 85 billion euros can be sealed. Pro-European Union opposition parties were left to save the bill and have continued to prop up Tsipras’ government.

“This nation no lengthy has democracy, however a peculiar sort of totalitarianism – a dictatorship of the euro“, outstanding dissenter Panagiotis Lafazanis stated. But he added that if party rebels wanted a quick solution to the continuing rift, Syriza could carry out a snap referendum over whether to accept tough austerity measures that would be required in a new bailout deal.

Tsipras on Friday told parliament that he had authorised then finance minister Yanis Varoufakis to prepare a “defence plan” in the event of Greece being forced to leave the euro.

“I personally gave the order to prepare a team to prepare a defence plan in case of emergency”, said Mr Tsipras, who compared Greece’s situation with being on a war footing.

“It would have been politically naive… not to do so”.

But the prime minister said he “did not have, and never prepared, plans to take the country out of the euro”.

He did not directly refer to Dr Varoufakis’ disclosure of plans to hack into his ministry’s software to obtain tax codes, but said that the idea of a database giving Greeks passwords to make payments to settle arrears was hardly “a covert and satanic plan to take the country out of the euro”.

“That would have created a parallel banking system while the banks were shut as a result of the ECB’s aggressive action to deny us some breathing space”, Mr Varoufakis said in a leaked phone conversation. “However you possibly can’t accuse him of dishonesty”.