Alexis Tsipras warns Angela Merkel of Greek ‘cashflow issue’ ahead of talks

Leaked letter alerts German chancellor that Greece needs urgent help to meet looming debt repayment deadlines

Helena Smith in Athens
published on Monday 23 March 2015 11.45
The Greek prime minister, Alexis Tsipras, has raised the stakes ahead of talks with Angela Merkel, warning that an insolvent Athens will be unable to meet looming debt repayments without urgent aid from its creditors.

In a letter leaked on the eve of his visit to Berlin, the leftwing leader catapulted to power promising to end austerity urged Merkel not to allow “a small cashflow issue” to turn into a major crisis.

“Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations in the spring and summer of 2015, it ought to be clear that … it would [be] impossible for any government to service its debt obligations,” said the five-page letter leaked to the Financial Times.

“Servicing these repayments through internal resources alone would, indeed, lead to a sharp deterioration in the already depressed Greek social economy – a prospect that I will not countenance,” the letter said.

Tsipras, who will hold face to face talks with Merkel for the first time on Monday, issued the warning as it became clear that the cash-strapped Greek state has come perilously close to running out of money. The coalition government, dominated by Tsipras’ leftwing Syriza party, may have to resort to raiding insurance funds to pay pensions and public salaries at the end of the month.

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Officials in Athens said Monday’s meeting with Merkel – which comes at a potential turning point for the eurozone – would be used to ram home the message that the new administration was determined to implement reforms. Berlin, the biggest contributor to the €240bn (£175m) bailout propping up the Greek economy, has made clear that without a concrete plan to overhaul the country’s dysfunctional state, there can be no further aid.

Tsipras, insiders said, would be attending the talks armed with an array of specific economic measures. “Under no circumstances do we want to appear submissive towards the Germans,” one official said. “But we want to convince [them] that we have a plan and the required determination to enforce it without calculating the costs.”

The proposals would include measures that no previous government had dared, from targeting oligarchs and corrupt vested interests to clamping down on tax evasion. Privatisations – of particular interest to Germany but stalled since elections in January – would also be among them.

Trust between Europe’s paymaster and the eurozone’s weakest link has been badly dented in the two months since the radicals assumed power. Athens has ratcheted up the pressure, demanding that Berlin pay war reparations for Nazi atrocities.

Senior EU officials have said that five years into the euro debt crisis time is running out for Greece. Athens has been told it will have to renege on its pre-election promises if it wants the crisis-plagued country to remain in the 19-member currency bloc.

“This government has been given a last chance to prove it wants [Greece] to stay in the eurozone,” German officials were quoted as saying on Monday.

One response to “Alexis Tsipras warns Angela Merkel of Greek ‘cashflow issue’ ahead of talks

  1. …Athens has been told it will have to renege on its pre-election promises if it wants the crisis-plagued country to remain in the 19-member currency bloc. …

    Germany is sounding more like the unmentionable previous leadership in the worst part of German politicians’ history every day.

    The EU created the debt in the bulk of the EU Eurozone and will not just forgive all the loans with a clean sheet.

    The poor cannot pay with their lives, for the mistakes of the EU government in the creation of the Euro money in the first place.

    Privatisation is not the answer. Neither is the Greek state dysfunctional. Greece is a different culture to Germany’s and should not have to comply with another culture’s idea of what is correct.

    Greece has a different history to other European nations.

    There is no such culture as European and there never has been.

    Each nation is a separate culture.

    Germany should be stopped from ruling Europe’s EU government.

    If there is any nation who should drop out of the Euro and leave EU membership, it is Germany.

    Because at the moment the only thing German politicians are doing are threatening the lives of the bulk of the EU membership nations’ populations in southern and eastern Europe.

    Perhaps it is time for the EU to demand Germany pay the war reparations from the Nazi occupation not just of Greece, but of Spain, Portugal, eastern Europe, the enslavement of Slavs as untermenschen, and any other EU member nation in debt to the EU.

    And the EU never to be a lender again, as it is a bad as any loan shark.

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