With Greece and creditors unable to come to a compromise on a deal over the past several days, we've said repeatedly that despite claims to the contrary by Greek economy minister George Stathakis, Greece will not make Friday’s €300 million payment to the IMF and will instead request to have the payments bundled so as to buy PM Alexis Tsipras a few extra weeks to negotiate a deal and pass an agreement through parliament.
Indeed, we said the following on Sunday [9]:
It's quite possible the sense of urgency around the negotiations has now eased because, as we mentioned on Saturday, it looks as though Greece can buy a few weeks by opting to "bundle" its June payments to the IMF, something the Greek government has denied (meaning it's probably assured) but which seems increasingly likely especially given cryptic comments like this one from economy minister George Stathakis:
- STATHAKIS SEES `TECHNICAL SOLUTION' SOON TO MEET IMF PAYMENTS
While it's unclear whether that means the country will find yet another channel by which they can ask creditors to pay themselves back as they did with the IMF last month or whether that's a reference to bundling the payments is unclear, but here's what Stathakis told Corriere della Sera:
"There shouldn't be any neeed [to bundle the payments]"
We shall see.
And then yesterday following the latest failure to reach a deal:
Pretty clear now Greece will bundle IMF June payments despite official spokesman's denial
— zerohedge (@zerohedge) June 3, 2015 [10]
However, Christine Lagarde was confident as recently as three hours ago [11]:
IMF chief Christine Lagarde said Thursday that she was "confident" that Greece will make a key debt payment on Friday, as the country mulls a new proposal from official creditors.
Lagarde said the proposal offered by European creditors in talks Wednesday, with revised performance requirements for the Greek government, "clearly demonstrated significant flexibility on the part of the institutions."
Needless to say, we were rather skeptical when she said it:
LAGARDE SAYS GREEK PAYMENT BUNDLING DOESN'T APPEAR IN CARDS #timestamp [12]
— zerohedge (@zerohedge) June 4, 2015 [13]
Now may be an opportune time for Lagarde to update everyone her "confidence" level, because moments ago, what we knew was inevitable, was confirmed:
- DJ GREECE SUBMITTED A REQUEST FOR BUNDLING JUNE IMF PAYMENTS INTO ONE -- GREEK GOVERNMENT OFFICIAL
And Reuters:
Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.
The request is expected to be approved by the IMF, the newspaper said. That would mean Greece does not have to pay the first tranche of 300 million euros that falls due on Friday.
Greece faces a total bill of 1.5 billion euros owed to the IMF over four installments this month.
And just like that, after effectively defaulting to the IMF a month ago, Greece has just re-effectively re-defaulted to the same IMF on its payment due tomorrow, which now will not be made, just as predicted.
Then, adding to the confusion, Greek PM Tsipras tweeted some token statement which for some inexpicable reason had a photo of himself in the tweet:
The Government will not accept extreme proposals. Our people have suffered enough during the past five years. #Greece [14] pic.twitter.com/5wUSoNtw0I [15]
— Alexis Tsipras (@tsipras_eu) June 4, 2015 [16]
All of the above of course indicates that Athens has rejected the proposal drafted by creditors on Tuesday and indeed we now have confirmation from the Greek finance ministry:
“After 4 months of negotiations, creditor institutions submitted proposals which can’t solve the riddle of the economic crisis caused by the policies implemented in the last 5 years. The proposals submitted would deepen poverty and unemployment”
“The agreement and solution which both Greece and Europe so badly need requires the immediate convergence of institutions to more realistic proposals, which will advance economic growth and social sensitivity. Greek government has submitted such proposals”
Just like that, Greece has called the troika's bluff and put the ball back into creditors' court. For their part, Europe expects a re-counter proposal to the troika's original counter proposal by June 8:
The Euro Working Group expects Greece to respond to an EU proposal to conclude the country’s bailout by June 8, according to a person familiar with the talks.
The farce continues.
In any event, with Friday's payment delayed, there are just a few more left.
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