Important events on the Greek crisis are coming quickly. An anti austerity rally is taking place in Athens just before the decisive Euro zone Finance Ministers meeting at Luxembourg on June 18th.
At Luxembourg, Greece and its bailout financers of the Euro zone are about to start an important and final phase of discussion for extending financial help to Athens. This phase may extend for the next one month, within which both parties should come to a consensus.
In the absence of such a consensus Greece have to make default and exit from the Euro zone. Such an outcome will add uncertainty for Euro zone as well as for the global economy.
Greece has to make an immediate payment of 1.6 billion Euros to the IMF by the end of this month. Already, Greek political leadership confirmed that they don’t have the money to repay the IMF debt.
IMF, who walked out of the discussion table blaming Athens for seriously deficient on reform commitments, has already declared that Greece will not get any grace period on its debt repayment.
So far, in the negotiation attempts outside formal attempts, Greece has not shown any hint of meeting the creditor’s demand of any serious austerity measures. Cutting pension will be end of political life for Prime Minister Alexis Tsipras and his Syriza party who came to power after getting anti austerity votes.
On the other hand, European leaders are looking for the trace of any reform measure from Athens.
The Greek PM has continuously insisted on arriving at the higher-level “political solution”. Message of the political solution is that Europe shouldn’t demand austerity while extending the line of help to Greece.
At the same time, a political solution is irrelevant for IMF, who uses the money from its members to finance Greek debt. Understandably, the Greek political demand is that Europe should bear the burden of Greek bailout, in the wake of the IMF pull out.