Greeks Bearing Debts
Tsipras Changes Tone, but Not Substance

Greek Prime Minister Alexis Tsipras today left open the possibility that a referendum, but not a snap election, would be called in the coming days. Reuters:

In his first major television interview since being elected in January, Tsipras said he expected a deal with creditors by May 9, three days before a debt payment to the IMF of about 750 million euros ($815.5 million) falls due. He ruled out a default but stressed that the government’s priority was to pay wages and pensions.

Pressed on what the government’s options were if no deal was found, Tsipras ruled out snap elections, saying it had only been a few months since the government had been voted in.

But he said the government did not have the right to accept demands from lenders that fell outside the limits of its mandate to end austerity cuts and would have to ask Greeks to decide.

“If the solution falls outside our mandate, I will not have the right to violate it, so the solution to which we will come to will have to be approved by the Greek people,” Tsipras told Star television in the interview.

Having yesterday sidelined his polarizing Finance Minister Yanis Varoufakis in future negotiations, Tsipras today tried to sound optimistic, saying that a deal was within reach. He noted that the sale of the Port of Piraeus and the lease of several airports had been agreed to in principle, but that his government was holding the line on questions of labor market reforms (allowing for easier firing of employees), pension cuts, and a hike in the value-added tax on certain popular islands.

Tsipras also noted in passing that a €3-5 billion prepayment could be forthcoming from Russia once Athens struck a deal with Moscow on the Turkish Stream pipeline project.

This is all very likely an attempt by Tsipras to put a brave face on a dire situation for Athens. OpenEurope reports that most mayors and university rectors across Greece are refusing to comply with last week’s edict to hand over their cash reserves to the central government. That puts not just the May 12 payment to the IMF in jeopardy, but also upcoming payments to pensioners and government workers. Markets seem to have reacted positively overall to Tsipras’ new tone, but very little of substance has changed. The only question is when and if a point of no return will be passed, and what the European reality will be afterwards.

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