The European Commission braces for a “state of emergency” in Greece, fearing social unrest and a break-down of basic supplies
Greek premier Alexis Tsipras has accused Europe’s creditor powers of trying to subvert Greece’s elected government after five years of “pillaging”, warning in solemn terms that his country will defend its sovereign dignity whatever the consequences.
The defiant stand came as the European Commission lashed out at the Greeks and warned that the country would collapse into a “state of emergency” unless there is a deal to avert a financial crash.
Germany’s EU Commissioner Guenther Oettinger said the creditor powers must draw up urgent plans to cope with social unrest in Greece and a break-down of energy supplies and medicine as soon as July.
In a terse statement, Mr Tsipras called on the EU institutions and the International Monetary Fund to “adhere to realism”.
He accused the creditors of “political motives” for demanding further pension cuts, hinting that their real goal is to destroy the credibility of his radical-Left Syriza government and force regime change.
“We are not only carrying a historical past underlined with struggles. We are carrying our people’s dignity as well as the aspirations of all Europeans. We cannot ignore this responsibility. It has to do with democracy,” he said.
Germany’s Suddeutsche Zeitung reported that the creditors are drawing an ultimatum to the Greeks, threatening to cut off Greek access to the European payments system and forcing capital controls on the country as soon as this weekend. The plan would lead to the temporary closure of the banks, followed by a rationing of cash withdrawals.
Mario Draghi, the head of the European Central Bank, said the authorities could handle the immediate fall-out from a Greek default but refused to offer any further assurances. “The consequences in medium to long term to the Union is not something we are in a position to foresee,” he said.
Mr Draghi was accused of waging “systematic economic warfare” against Greece by a radical Euro-MP from Spain’s Podemos movement, one of a blizzard of virulent attacks in Strasbourg today that show just how dangerously polarised Europe has become after seven years of quasi-depression.
A Syriza official told the Telegraph that the final denouement may come earlier since depositors will almost certainly try to withdraw their money if there is no accord in sight, setting off a bank run. “We are a little surprised that it has not happened yet. Depositors have been very stoic,” he said.
The suspicion in Athens is that the creditors are deliberately engineering a Greek political crisis in what amounts to an arms-length coup d’etat, an allegation dismissed as absurd in Brussels. The IMF says the Greek pension system gobbles up 16pc of GDP – one of the highest in the world – and must be brought under control before there can be any further money.
Greece’s endgame: timeline of upcoming events
IMF loan repayment: €305m (missed)
Greece due to sell €1.6bn in Treasury bills to refinance maturing debt
IMF loan repayment of €312m due
IMF loan repayment of €573m due
Eurogroup Meeting in Luxembourg
IMF loan repayment of €343m due
Greece owes €85m to the ECB for bonds the central bank bought
European Union finance ministers meet
June 25 and 26
European Union leaders Summit in Brussels
Greece due to pay €1.5bn wage and pensions bill by month-end
Greece’s current bail-out deal expires
Greece must also make all its IMF payments by this date or it will be in arrears to the Fund
Full article: Greece accuses Europe of plotting regime change as creditors draw up ultimatum (The Telegraph)