Panic and a series of denials followed the publication of Der Spiegel magazine that according to the report of the Troika, Greece has not complied with any of its obligations under the Memorandum of financial support of 110 billion euros and the fifth tranche of 12 billion euros would not be paid. The first response came by the International Monetary Fund and its representatives told Reuters that the allegations are not true. The negotiations continue, they are in progress and are soon expected to conclude, they said from the Fund and stressed that nothing is predetermined yet.
Especially disaffected with the information published in Der Spiegel was the Greek Finance Minister Georgios Papakonstantinou. He stressed that the information the German edition released is untrue, because first the negotiations are running at a satisfactory pace, and the report of the supervisors on the implementation of the economic and structural reforms is not ready yet. Papakonstantinou said evasively that there are reasons to believe that the negotiations would be positive, without giving more details what the base of his positivism is.
At the same time, the European leaders tight the knot around Greece too. The French Finance Minister Christine Lagarde stated that there is political fatigue in Greece, which hampers the development of the fiscal consolidation. The new candidate for the head of the International Monetary Fund said that Greece should implement a package of privatizations this year, which unfortunately have not even started yet. Lagarde noted that Greece has committed to earn about 15 billion euros from privatization in 2011, and the privatization revenues in the middle of the year are still zero.
Asked whether the Greek people should accept and bear new, more stringent economic measures and cuts Christine Lagarde took the role of the "Iron Lady". She was clear that public finances should be consolidated first and social policy comes next. Lagarde stressed that after Europe and the IMF have shown their solidarity with the country, offering the "low interest rate" loan of 110 billion euros, Greece is expected to return the efforts.
The Troika announced still in February some inconsistencies in the implementation of the recovery plan, told the Commissioner for Economic Affairs of the European Union Olli Rehn for Der Spiegel this week. "The Greeks themselves began to talk of debt restructuring. This slowed down the pace of reforms. Combating tax evasion was not implemented as expected." Olli Rehn explained that the goal of all efforts around the Memorandum of financial support and its measures is Greece to reach 5% of primary budget surpluses after 2015. "The main issue is whether the political system in Greece has the will to achieve this goal and whether the society is strong enough. The situation is really serious " the Commissioner did not hide his worries.
The fifth tranche of the support to Greece is crucial and its payment depends on the final report of the Troika, which is to be announced later this week. The 12 billion euros from the tripartite loan will be used primarily to repay the foreign debt obligations maturing in the summer, but also to cover the revenue and expenses deficit. Its average monthly value is around 1.5 billion euros, excluding the further deviations from the recovery program. In June, Greece has to pay two billion euros the old creditors and find at least another 800 million euros to fill the budget deficit for that month. In July, the obligations to investors reach 7.7 billion euros. August may be the month of vacations for some, but the Greek Ministry of Finance will have to pay 11 billion euros. 5.9 billion euros of this amount are payments due to the maturity of five-year Greek government bonds, 2.5 billion euros are government securities, 2.6 billion euros are the total interest payable on these loans.
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