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Greece crisis: Alexis Tsipras dismisses 'irrational' proposals for country's debt repayment Greece crisis: Alexis Tsipras dismisses 'irrational' proposals for country's debt repayment
(35 minutes later)
Greek Prime Minister Alexis Tsipras has said his government could not accept “irrational” proposals like one made this week by the institutions overseeing Greece’s bailout, and insisted any solution must include some form of debt relief.Greek Prime Minister Alexis Tsipras has said his government could not accept “irrational” proposals like one made this week by the institutions overseeing Greece’s bailout, and insisted any solution must include some form of debt relief.
Addressing an emergency session of parliament, Mr Tsipras said he was “unpleasantly surprised” by the proposal from the International Monetary Fund, European Central Bank and European Commission during his visit to Brussels for talks with EC head Jean-Claude Juncker.Addressing an emergency session of parliament, Mr Tsipras said he was “unpleasantly surprised” by the proposal from the International Monetary Fund, European Central Bank and European Commission during his visit to Brussels for talks with EC head Jean-Claude Juncker.
Mr Tsipras’s speech came the morning after his government announced it would not pay an IMF debt repayment due, and would instead bundle all four instalments due in June into one payment at the end of the month. Mr Tsipras’s speech comes the day after his government announced it would not pay an IMF debt repayment due, and would instead bundle all four instalments due in June into one payment at the end of the month.
Although allowed under IMF rules, the option is rarely used – the last country to do so was Zambia in the 1980s – and highlighted the brinkmanship of Greece’s negotiations, and the dire state of the country’s liquidity. The move highlighted the brinkmanship of Greece's protracted negotiations to release the remaining funds in its international bailout, and the dire state of the country's liquidity.
“The probability of an eventual debt default has clearly risen, which could set off  a process that includes capital controls to prevent meltdown in the Greek banking system,” said Neil MacKinnon,  global macro strategist at  VTB Capital. Without the 7.2 billion euros left in the 240 billion euro bailout fund it's been relying on since 2010, Greece will be unable to meet its steep debt repayments to the IMF and European Central Bank over the next few months. Bankruptcy looms, and with it a potential exit from the euro.
The Greek government, which is dominated by the radical-left Syriza party, was elected in January on a promise to end hated austerity measures that it blames for many of Greece’s woes. Tsipras also faces growing anger from within his own radical left Syriza party, where hardliners, including some Cabinet members, have been calling for a break with creditors. At least two ministers said Friday that if the lenders don't back down from their current positions, one option would be to call for elections in Greece and ask the population whether they want to remain in the euro at any cost.
Addressing politicians for the first time on the course of his government's troubled four-month negotiations with Greece's international lenders, Tsipras said he was “unpleasantly surprised” by the proposal put forward by the International Monetary Fund, European Central Bank and European Commission during his visit to Brussels for talks with commission head Jean-Claude Juncker.
“I would like to believe that this proposal was an unfortunate moment for Europe, or at least a bad negotiating trick, and will very soon be withdrawn by the same people who thought it up,” he said.
Still, he said, he believes a deal is now closer than ever.
What Greece needs, Tsipras insisted, was a solution to what he described as a vicious circle of austerity and debt leading to economic contraction and poverty.
“We don't just need an agreement, we need a definitive solution, both for Greece and for Europe, that will finally end the talk of a Greek exit from the eurozone.”
The institutions' proposal, Tsipras said, insisted on the austerity which has accompanied Greece's bailout since it first began five years ago and which the government blames for the dire state of the country's economy, which has contracted by a quarter.
“The fiscal strangulation of a country is a moral issue that conflicts with Europe's founding principles — which raises well-founded questions on Europe's future,” he said. 
In its discussions with creditors over the release of the €7.2bn remaining from its €240bn bailout fund, the Greek government has sought to get rid, or at least minimise, the scale of those austerity measures on Greece.In its discussions with creditors over the release of the €7.2bn remaining from its €240bn bailout fund, the Greek government has sought to get rid, or at least minimise, the scale of those austerity measures on Greece.
An opinion poll yesterday suggested public support for the government’s tough negotiating position is slipping. The Alco survey for news website Newsit found 47 per cent disagreed with the way the government was handling negotiations, while 39 per cent agreed.An opinion poll yesterday suggested public support for the government’s tough negotiating position is slipping. The Alco survey for news website Newsit found 47 per cent disagreed with the way the government was handling negotiations, while 39 per cent agreed.
APAP