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Greece shocks with IMF payment delay

Friday, June 05, 2015 - 02:12

Greece delays a key debt payment to the IMF due on Friday as Prime Minister Alexis Tsipras, facing fury among his leftist supporters, demands changes to tough terms from international creditors. David Pollard reports.

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It's not a default. It's a delayed debt payment. That's the official line, anyway. But Greece's decision to - for the first time in five years of crisis - postpone a repayment on its 240 billion euro bailout has shocked. FXPro's Angus Campbell. SOUNDBITE (English) ANGUS CAMPBELL, SENIOR ANALYST AT FXPRO, SAYING: ''This is just simply another mode of defiance, really, in terms of how it deals with these negotiations. So we've got further to go for this saga. We know, and we have known throughout this year, that this was going to be very long-running, that June was going to be a critical month.'' It seemed so different on Wednesday. European officials saying a deal with creditors was in sight. That after Greek Prime Minister Alexis Tsipras met European Commission president Jean-Claude Juncker. Even Tsipras himself hinted there would be no issue with a deadline for the 300 million euro payment. By Thursday the rhetoric was different. Juncker warning that though progress had been made - it wasn't enough. And Tsipras's Syriza lawmakers like deputy labour minister, Dimitris Stratoulis, furious at the reforms demanded by creditors. (SOUNDBITE) (Greek) DEPUTY LABOUR MINISTER, DIMITRIS STRATOULIS, SAYING: "The entire package that was presented (to us) yesterday is rejected by our government. We will not continue the policies of austerity." The key sticking points: a proposal to scrap a benefit for low-income pensioners and an increase in VAT on electricity. Creditors are also said to be asking Athens to commit to state asset sell-offs and unpopular labour reforms. Measures that would cross Syriza's 'red lines'. James Knightley from ING says Greece's ruling party may now have to go back to voters. SOUNDBITE (English) JAMES KNIGHTLEY, SENIOR GLOBAL ECONOMIST AT ING, SAYING: "One possible way to get around it of course is offering a referendum on any possible deal. Let the people decide. Because of course Tsipras and his Syriza party have suggested that they haven't got the mandate to offer the sort of concessions that the EU and the IMF want." Greece says it now wants to bundle this payment together with others - into a single 1.6 billion euro lump sump due on June 30. Technically not a default then. But its sceptics describe Greece as tottering towards bankruptcy. And ask whether it's now one step closer to leaving the euro zone.

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Greece shocks with IMF payment delay

Friday, June 05, 2015 - 02:12