“International Monetary Fund representatives have cut short negotiations with Greek officials in Brussels, after they failed to present a viable reform plan. The move has left Athens, due to repay €1.6 billion by the end June, on the edge of default,” RT reports.
“The ball is very much in Greece’s court,” IMF spokesman Gerry Rice told the media. “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”
With wages and pensions at 80 percent of total public spending “it’s not possible for Greece to achieve its medium-term fiscal targets without reforms, and especially of pensions,” according to the Russian news agency.
“There is no more space for gambling; there is no more time for gambling. The day is coming, I am afraid, that someone says the game is over,” said Donald Tusk, the president of the European Council.
Greek Prime Minister Alexis Tsipras, was due to continue talks with Juncker on Friday, but in view of the latest impasse, it may now be postponed. His Syriza party was elected in January with backing from traditional socialist voters and an overlapping group of those simply tired of endless austerity measures from Brussels. Since 2008, Greece’s GDP has collapsed by almost a third.
“EU officials revealed on Friday that they had held their first formal talks on the worst-case scenario for Greece, but the darkening outlook failed to fluster Prime Minister Alexis Tsipras, who holed up with his negotiators after proclaiming his optimism at an open air concert,” Reuters reports.
No one knows, whether the anti-austerity government can reach a deal with its international lenders before an end-June deadline to avoid putting the country in grave danger of crashing out of the Eurozone.
Greece should stay in the Eurozone by any means, as Grexit would undermine the very idea of the European unity, German Foreign Minister Frank-Walter Steinmeier said on June 13th, according to Sputnik.
On the same day, “Greek premier Alexis Tsipras warned Greece to prepare for a “difficult compromise” with its EU-IMF creditors as his closest advisors delivered a last-chance proposal to avert a catastrophic default by Athens,” AFP reported.
Earlier this week, Standard & Poor’s lowered Greece’s sovereign rating one notch further into junk territory, saying the country would likely default within the next 12 months if it didn’t agree with its creditors over the €7.2 billion installment.
Last Wednesday, the European Central Bank raised emergency funds for Greek banks by €2.3 billion, the biggest weekly amount since February, as depositors were nervously withdrawing their savings due to the country’s uncertain future in the Eurozone.
On Friday, June 5, Greece skipped a €300 million IMF payment, promising to pay all four payments due this month worth €1.6 billion by June 30.
The country’s public debt currently stays at €320 billion, equivalent to 175 percent of the country’s GDP, while the maximum acceptable level for Eurozone countries should be not more than 60 percent of GDP.
The Global X FTSE Greece 20 ETF [$GREK ], which seeks to provide investment results that correspond generally to the price and yield performance of the FTSE/ATHEX Custom Capped Index, has been trading in both negative momentum and trend recently. Long-term, the index tracking product has been remaining in a negative trend roughly since July 2014, almost for a year.