Greek Prime Minister Alexis Tsipras. Photo courtesy of Wikipedia.
The Prime Minister of Greece, Alexis Tsipras, warned German Chancellor Angela Merkel that it’s going to be “impossible” for his country to service its debt obligations that are due in the coming weeks if the European Union (EU) doesn’t provide Athens with any short-term financial assistance, the Financial Times (FT) reports on Sunday.
The warning was sent by the Greek PM to the German Chancellor in a letter — obtained by the FT — that was dated March 15, just before Merkel had agreed to meet Tsipras on the sidelines of the EU summit last Thursday where she invited him for a one-on-one session in Berlin, scheduled for Monday evening.
In the letter sent to Merkel, Tsipras warned that Athens would be forced to choose between paying off loans — primarily owed to the International Monetary Fund (IMF) — or to continue its social spending, the FT reports.
Tsipras blamed the European Central Bank (ECB) limits on Greece’s ability to issue short-term debt as well as eurozone bailout authorities’ refusal to disburse any aid before the country adopted a new round of economic reforms, the FT reports.
More from the FT:
“Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations during the spring and summer . . . it ought to be clear that the ECB’s special restrictions when combined with disbursement delays would make it impossible for any government to service its debt,” Mr Tsipras wrote.
He said servicing the debts would lead to a “sharp deterioration in the already depressed Greek social economy — a prospect that I will not countenance”.
“With this letter, I am urging you not to allow a small cash flow issue, and a certain ‘institutional inertia’, to not turn into a large problem for Greece and for Europe,” he wrote.
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