Troika Demands Could Create Rupture Within SYRIZA

[Jefferson23]

Dimitri Lascaris Report: The IMF knew that the Greek debt was unsustainable and demanded that it be written down, but this proposal was rejected by the Troika, with consequences that could include a rupture within SYRIZA

- June 11, 2015

Transcript* snip: So joining us today is Dimitri Lascaris. He's a partner with the Canadian law firm Siskinds where he heads the firm's securities class action practice. He's also a board member of The Real News Network. As always, Dimitri, thank you for joining us.

DIMITRI LASCARIS, SECURITIES CLASS ACTIONS LAWYER: Thank you, Sharmini.

PERIES: So Dimitri, you've been following what has happened since last week, June 5th. There was a payment to be made by Greece to the International Monetary Fund. What happened?

LASCARIS: Well, let's--in the weeks leading up to the crisis, an important schism seemed to have developed in the creditor group for Greece, and that group is comprised principally of the IMF, the ECB, and the European Union. And the schism related to whether or not, the question of whether or not Greece's debt was sustainable and needed to be written down. And the IMF was taking the position that for some period of time, and it was becoming increasingly aggressive about taking this position that Greece's debt needed to be written down because as anybody with any economic sensibility or financial sensibility knows, Greece's debt is unsustainable. However, the ECB and the EU were opposing this position.

And so on about June 1st Angela Merkel convened a meeting with Christine Lagarde, the managing director of the IMF, Jean-Claude Juncker on behalf of the EC, and Mario Draghi on behalf of the ECB, she also invited President François Hollande from France, to try to formulate a unified position vis-a-vis Greece. And what emerged from that was something which was characterized as a final offer, a unified final offer on behalf of these three groups that comprise the Troika. And the IMF's demand that Greece's debt be restructured, that it be written down, and that its creditors recognize a loss on its loans to Greece was dropped.

The precise terms of this unified offer are not clear, but what is clear is that the offer, which from the perspective of the Greek government was an ultimatum, generated a very hostile reaction. And this precipitated an op-ed by the Greek prime minister Alexis Tsipras in Le Monde where he effectively lambasted the creditors of Greece, the Troika, for taking positions that were unduly aggressive and unrealistic, and not sufficiently deferential to the democratic mandate of Syriza. And he responded, or the Greek government responded with their own offer.

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[bemildred]

1. +1. Thanks. nt