Greek leader: cannot consent to ‘irrational’ proposals

Greece cannot accept the “irrational” proposal made this week by its bailout creditors, Prime Minister Alexis Tsipras told an emergency Parliament session Friday, adding that any deal must also include some lightening of the country’s crushing debt load. Despite a significant writedown in 2012, Greece’s debt remains huge, at nearly 180 percent of annual output. Bailout creditors had initially promised further respite, but details on their latest proposal leaked by Athens made no mention of debt lightening.

There is no question of our accepting an agreement that does not contain the prospect of debt restructuring [that would help Greece regain the market access lost five years ago].

Prime Minister Alexis Tsipras

Tsipras’ speech came the morning after a surprise announcement that Greece would defer an IMF payment due Friday, and would instead bundle all four installments due in June — a total of 1.6 billion euros — into one payment at the end of the month. It is the first time a developed economy has taken the option of bundling payments — an emergency maneuver allowed by the IMF but last used by Zambia in the 1980s. The move highlighted the brinkmanship of Greece’s protracted negotiations to release the remaining funds in its international bailout, and the dire state of the country’s liquidity.

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