France and Italy are next, warns Greek premier

The crisis in Greece’s talks with its international creditors has put Prime Minister Alexis Tsipras under enormous pressure. Athens warns that if it is “punished”, Paris and Rome will soon follow. EURACTIV Greece reports.

In an unprecedented move, on Friday (5 June) Athens skipped a 300 million euro payment to the IMF, and decided to bundle four pending IMF loan payments into one, due at the end of the month.

In a bid to unlock the final 7.2-billion euro tranche of Greece’s bailout, Tspiras met European Commission President Jean-Claude Juncker in Brussels last Thursday (4 June), but failed to reach an agreement. According to Athens, the proposal by the country’s creditors should be rejected, as it did not reflect the progress achieved during previous negotiations.

>> Read: Greece skips IMF payment, buys itself time

The contradictory speech

In a speech before the Greek parliament on Friday (5 June), Tsipras painted a bleak picture of the negotiations between Athens and its creditors. At the same time, he said Greece was “closer to a deal than ever before”, triggering strong reactions from both opposition parties and EU officials.

Tsipras aimed at cornering the opposition parties by winning their backing for the rejection of the latest proposed agreement of his country’s international lenders. At the same time, he tried to appease the hardliners of the far-left fractions within his own party.

“The Greek government cannot consent to absurd proposals,” Tsipras told lawmakers. “I want to believe that this proposal was a bad moment for Europe, or at the very least, a bad negotiating trick and will soon be withdrawn by the masterminds themselves,” he said.

Tsipras also warned of the consequences of Greece’s possible punishment for the rest of Europe.

“Those who believe that Greece’s punishment will only hit Greece, and that the next day will be the same [in Europe], are completely ignorant,” warned the Greek premier, saying that Rome and Paris will be the next victims of the Troika.

What that punishment would be, for countries other than Greece, is difficult to surmise. Forced privatization of state assets, and spending cutbacks on infrastructure, civil servant salaries, and healthcare, are likely what Tsipras has in mind.

>>Read: EU deal puts Syriza’s unity to the test

Echoing the Greek premier, finance minister, Yanis Varoufakis, emphasised that Athens has already made remarkable concessions toward the lenders.

In the 47-page proposal submitted to the Institutions (the new name for the Troika) the Greek government crossed and compromised on “many red lines and pre-election promises”, Varoufakis said, adding that Athens had a “great desire to achieve an agreement”.

Tsipras under fire

Opposition parties blamed the Greek premier for the deadlock, claiming that the measures submitted by the previous coalition government to the creditors just before the Greek elections in January were “softer”.

“The government is looking for accomplices in the failure… We are not negotiating together for the future. Thus the failure exclusively belongs to the government and Mr Tsipras,” was the message delivered by the leader of centre-right New Democracy and former PM, Antonis Samaras.

Samaras added that his party will first see the final agreement and then will decide whether approve it or not.

The leftist Potami [S&D affiliated] was more moderate, but warned Tsipras not to be the prime minister who says, “Unfortunately, we went bankrupt.”

Its leader, Stavros Theodorakis, stated that his party stands ready to back a final proposal of the Greek government that would bring for a vote in the parliament, but it would not be given a blank cheque.

He also urged the creation of a “national committee for the negotiations” in order for Greece to have a common national line.

“Tsipras was saying he would change Europe… he didn’t manage to do so,” Theodorakis concluded.

Juncker’s disappointment

During the G7 summit in Bavaria, Jean-Claude Juncker strongly reacted to Tsipras’s speech in Greece’s parliament, saying that Athens should immediately send the “alternative proposals” in order for the negotiations to continue.

Juncker said he had been disappointed by Tsipras’ speech. “He was presenting the offer of the three institutions as a leave-or-take offer. That was not the case … He knows perfectly well that is not the case.”

The Commission chief also disclosed that he rejected a telephone call on Saturday from the premier, claiming that he hadn’t received the alternative proposals from Greece on Thursday, as promised.

“Alexis Tsipras promised that by Thursday evening he would present a second proposal. Then he said he would present it on Friday. And then he said he would call on Saturday. But I have never received that proposal, so I hope I will receive it soon. I would like to have that Greek proposal,” he said.

On the other hand, Athens claimed that it had never set any deadline for the submission of the alternative proposals. Yesterday (7 June) government officials said the new compromise proposals are to be sent by Wednesday.

In response, European Parliament President Martin Schulz put further pressure on Greece to agree on a deal with its international creditors.

He told Welt am Sonntag: “Time is running out and the consequences would be dramatic,” he said, warning Greece against “turning down the outstretched hand again”.

US President Barack Obama and German Chancellor Angela Merkel discussed Greece in their bilateral meeting ahead of the G7 summit, White House spokesman Josh Earnest told reporters on Sunday.

Earnest added that the two leaders agreed that Greece must reform and return to sustainable long-term growth, with Obama arguing that Athens and its lenders can continue the negotiations without causing volatility in financial markets.

Greeks want to remain in the Eurozone

In the meantime, a new poll published last week suggests that the vast majority of Greeks (75%) want the country to remain in the eurozone, sending a clear message to their coalition government.

In addition, Syriza might be steadily leading the polls in Athens, but a growing number of Greek people (50%) feel international pressure to say “yes” to a deal that crosses the pre-election, anti-austerity red lines.

Speaking to EURACTIV Greece, Gabriele Zimmer, the chairwoman of Confederal Group of the European United Left - Nordic Green Left, attacked German Minister of Finance Wolfgang Schäuble, claiming that his stance will split the EU.

“Mr Schäuble is not only playing the hardliner, he is one. He is dogmatically convinced that austerity works despite the obvious reality in the EU and especially in Greece showing the contrary. I do not know the situati,on inside the conservative party but there are also some reasonable members which do not close their eyes looking onto reality. They cannot fully support Mr Schäuble, as his line will probably lead to worsening the social situation in many countries and to a split of the EU. Mrs Merkel has proved to be more sensitive in the past towards changing situations. I think she will also be able to find a compromise this time,” she pointed.

“I think Alexis Tsipras is totally aware of the expectations the Greek population has, as well as his party and its tendencies. The government is in a very difficult situation, as Greece urgently needs money because it hasn't received any euros since August 2014, even if it was agreed with its partners. And Tsipras has to negotiate with neoliberal governments and institutions, which do not want to accept that their crisis policies have completely failed. His party knows that and will support him. I am quite confident that there will be a deal within the people’s mandate. He already achieved much more for Greece than any other Government before,” she concluded.

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