Greece is drawing up drastic plans to nationalise the country's banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.
Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.
Greece no longer has enough money to pay the IMF €458m on April 9 and also to cover payments for salaries and social security on April 14, unless the eurozone agrees to disburse the next tranche of its interim bail-out deal in time.
“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official.
“We may have to go into a silent arrears process with the IMF. This will cause a furore in the markets and means that the clock will start to tick much faster,” the source told The Telegraph.
Syriza’s radical-Left government would prefer to confine its dispute to EU creditors but the first payments to come due are owed to the IMF. While the party does not wish to trigger a formal IMF default, it increasingly views a slide into pre-default arrears as a necessary escalation in its showdown with Brussels and Frankfurt.....
Syriza sources say are they fully aware that a tough line with creditors risks setting off an unstoppable chain-reaction. They insist that they are willing to contemplate the worst rather than abandon their electoral pledges to the Greek people. An emergency fall-back plan is already in the works.
“We will shut down the banks and nationalise them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU,” said one source. It is well understood in Athens such action is tantamount to a return to the drachma, even though Syriza would rather reach an amicable accord within EMU....
“They want us to impose capital controls and cause a credit crunch, until the government becomes so unpopular that it falls," said one official.Hardball.
"They want make an example of us, and demonstrate that no government in the eurozone has a right to have mind of its own. They don’t believe that we will walk away, or that the Greek people will back us, and they are wrong on both counts,” he said....
The Telegraph
Greece draws up drachma plans, prepares to miss IMF payment
Ambrose Evans-Pritchard
7 comments:
Hardball if they follow through on it. But what's with this "Greek official" and "sources close to Syriza" stuff?
This guy, Pritchard, is often waaay out there so I would take what he says with a grain of salt. I doubt there are any "drachma plans."
Another article claimed Yanis said he was considering adapting Bitcoin as the national currency. I haven't wrapped my head around how that would work.
Of course some of these rumors are probably posturing to improve Greece's bargaining position. I'll believe the Grexit when I see it.
Avoiding paying the IMF is the best approach since their default procedure is so weak as to be laughable.
Because obviously they have no enforcement mechanism!
Ok, we're going to get reaaaallly tough now. You're cut off! We're not going to lend any more of you the thing that poisons you. Unless you change your name to Gukraine.
Yo, Greece - who has the dry mouth?
Dan Lynch.... April Fools!!
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