On Monday we got still more bad news for Greece. Around one-third of Angela Merkel’s Christian Democratic bloc opposes further aid for Athens meaning the Chancellor faces an uphill battle in convincing German lawmakers to keep Greece on life support. Meanwhile, a new report from the Hellenic Confederation of Commerce and Enterprises suggests that each day without a deal costs the Greek economy €22.3 million.
Not to put too fine a point on it, but Tuesday’s headlines are even worse.
First, up is parliamentary speaker Nikos Filis confirming what the IMF leaked on Saturday: without a deal, Greece will default on June 5.
Greece will not be able to make a payment to the International Monetary Fund that falls due on June 5 without a deal with its international lenders, the government’s parliamentary speaker said on Wednesday.
While everyone should by now be desensitized to the sheer ridiculousness inherent in this circular funding scheme, as you can see from the following, the absurdity never ceases to amaze:
“If there is no deal by then that will address the current funding problem, they won’t get any money. There is no money for the foreign (lenders) when they have not given us any funds for a year,” Filis said.
Basically, it’s not clear to Filis why these “foreign lenders” expect to get their money back when they haven’t sent Greece the money to repay them.
Athens is promoting the idea of a special levy on banking transactions at a rate of 0.1-0.2 percent, while the government’s proposal for a two-tier value-added tax – depending on whether the payment is in cash or by card – has met with strong opposition from the country’s creditors.
A senior government official told Kathimerini that among the proposals discussed with the eurozone and the International Monetary Fund is the imposition of a levy on bank transactions, whose exact rate will depend on the exemptions that would apply. The aim is to collect 300-600 million euros on a yearly basis.
Full article: Greece To Tax Bank Transactions, Says IMF “Won’t Get Any Money” On June 5 (Zero Hedge)