Syriza threatens to default on IMF loan if not allowed to borrow

With less than a week until Greece is due to repay €750 million to the International Monetary Fund (IMF), leaked documents from the governing Syriza party indicate the Greeks are threatening to default on the repayment unless country's bailout conditions are relaxed.

Far-left Syriza stormed to power in last February's elections after pledging to reverse the austerity measures placed on Greece by the IMF, European Central Bank (ECB) and Eurozone finance ministers, however since then the Greek government has been hard pressed by the so-called troika to comply with the terms of their bailout.

Greece repaid €200 million to the IMF yesterday and is due to repay another €750 million next Tuesday, however documents published by Greece's Proto Thema Sunday newspaper and translated by the Times today show that Syriza will issue an ultimatum to the ECB saying Greece will default unless it is allowed to raise up to €10 billion by issuing new government debt.

The ECB has capped the amount of short-term debt which Greece can receive to €15 billion, which Greece have persistently tried to negotiate for this be lifted to €25 billion to little avail.

Syriza's plan to use this increased borrowing allowance to repay lenders in the Eurozone and the IMF in €3 billion chunks on time, without a formal agreement to continue the austerity plan which forced the previous government to drastically cut public spending.

Although prime minister Alexis Tsipras has repeatedly stressed that his party is not planning for a Greek default on debt, documents from the Tsipras administration leaked by the Greek press make clear Syriza's position that "if there are no clear moves, the country will not hesitate to move towards a credit crunch by not paying its IMF instalment in mid-May".

The document explains that the money currently available is "enough only for wages and pensions" which Tsipras has previously refused to cut in order to comply with the austerity budget as he has marked out paying both as a priority.

This comes after the Greek parliament approved a new law to reverse massive layoffs of thousands of government workers during the previous Greek government in an attempt to reduce state spending by reducing the wage bill.

As many as 15,000 employees could be rehired by the government under the new law, according to the Financial Times, in what is being reported as a political snub to creditors.

In a similar move, Greek MPs backed relaunching the state broadcaster, ERT, last week. The channel was shut down by the previous government in another bid to curb spending.

This week Nikos Voutsis, the interior minister, told parliament that the government had no intention of deferring to the Eurozone's bailout monitors. "We don't have to, we're a sovereign state," Voutsis said.

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