Galery

1

Greek Prime Minister Alexis Tsipras had sent a letter to German Chancellor Angela Merkel on 15 March, as revealed by the British newspaper Financial Times. In it, he warns that Athens will not be able to service its debts to the lenders if the European Union does not provide any short-term financial support to the country.

The content of the letter is being disseminated in times of serious concerns about whether Greece will be able to pay salaries and pensions at the end of March, and when the risk of it running out of liquidity at the end of April is real.

The letter was sent two days before Angela Merkel accepted the proposal of Alexis Tsipras for holding a meeting on Greece within the context of the EU summit last Thursday and before she invited him to Berlin, where they will meet later today.

In the letter, the Greek Prime Minister warns that his government will be forced to choose between servicing the obligations to its lenders, especially to the International Monetary Fund and paying salaries and pensions. In a particularly sharp tone, he argues that the situation is the fault of the European Central Bank's decision to limit the number of T-bills that Greece may issue and of the euro zone due to its refusal to provide any financial assistance to Athens before it has implemented economic reforms.

"Given that Greece has no access to money markets and also in view of ‘spikes’ in our debt repayment obligations during the Spring and Summer, it ought to be clear that the ECB’s special restrictions when combined with the disbursement delays would make it impossible for any government to service its debt obligations," Tsipras states in the letter, adding, "Servicing these repayments through internal resources alone would lead to a sharp deterioration in the already depressed Greek economy - a prospect that I will not countenance."

"With this letter I am urging you to not allow a small cash flow issue and a certain ‘institutional inertia’ to not turn into a large problem for Greece and Europe," said the letter.

Alexis Tsipras does not fail to blame the previous Greek government for the present situation, "Following past failures of the previous government to complete the scheduled reviews (the progress of the rescue programme – author’s note), disbursements under the loan agreements with the ESM-EFSF were discontinued while those of the IMF were similarly delayed, yielding a substantial financing gap in 2014 and 2015."

Tsipras is also critical towards the technical teams of the lenders’ representatives which he accuses of the zero success of the negotiations between the Brussels group and the cabinet in Athens. "The reason for the extremely slow progress is that the institutions’ technical teams as well as some of the actors at a higher level seem to show little regard for the 20^th February agreement and are, instead, committed to proceeding along the lines of the Memorandum. It is difficult to believe that our partners consider that a successful reform drive can be carried out under such restrictive and pressing constraints, including the financial squeeze that my government is currently labouring under."

At the end of his five-page letter, the Greek Prime Minister states, "Greece is committed to fulfilling its obligations in good faith and close cooperation with its partners," at the same time alarming Angela Merkel that the failure in the attempt to secure short-term financing could lead to much greater problems.

Today Alexis Tsipras will meet with the German Chancellor in Berlin at 6:00 pm local time. It is expected that he will present the draft reform plan proposed by Athens to the lenders as decided at the meeting in Brussels last Thursday.

Statements to the media and a press conference will follow immediately after the conversation and a working dinner will begin at 8:00 pm that, in addition to Angela Merkel and Alexis Tsipras, will involve five of their associates.