European parliament president Martin Schulz has urged Greece to accept the proposal by creditors for cash-for-reforms deal. On Friday, Prime Minister Alexis Tsipras stated that any deal must include some lightening of the country’s crushing load.
In an interview with German newspaper Welt am Sonntag, published on Sunday, Schulz said that creditors have already made concessions in debt negotiations. On the other hand, Tsipras stated that there is no question of our accepting an agreement that does not contain the prospect of debt restructuring. This would he Greece to regain the market that it lost five years ago, added Tsipras.
“I can only warn the Greek government against turning down the hand-held out to them,” said Schulz.
Schulz added that time is running out and the consequences would be dramatic. Tsipras has rejected the terms proposed by the lenders that will send Greece into default and send them out of the Euro zone. Despite of a significant write-down in 2012, Greece’s debt remains at 180 percent of annual output. Though bailout lenders promised further respite, details of the latest proposal revealed that there is no debt lightening.
Tsipras speech during emergency parliament meeting came after an announcement that Greece would defer an IMF payment due on Friday, and would bundle four installments, totaling to 1.6 billion euros in June. This would mark the first time a developed country has taken the option of bundling payments, an emergency move allowed by the IMF.
The move sent Athens Stock Exchange tumbling to close down by five percent, and the country’s borrowing costs shot up. Diego Iscaro, senior economist at HIS Global Insight said that the payment delay serves as a way to express frustration over the last best offer made by creditors to Greece. Hard-liners within Tsipras own party are criticizing the minister, and have been calling for a break with creditors.[ Via ]