The German government is playing chicken with the Greeks as the EU has called for an emergency creditors meeting Wednesday.
German Finance Minister Wolfgang Schaeuble said there is no more time or money going to Greece, without a resolution on terms of a payback.
Newly elected Greek Prime Minister Alexis Tsipras and Greek Finance Minister Yanis Varoufakis are both telling EU officials that Greece will not tolerate draconian austerity measures any longer to satisfy previous loan covenants and that there needs to be a reworked plan to satisfy the Greeks.
Greece’s public debt stands at more than 320 billion euros, about 175 percent of the country’s gross domestic product. The country wants to renegotiate with its official creditors new terms, the International Monetary Fund, the ECB and the European Commission.
“Greek debt cannot be repaid in the near future,” Varoufakis told the German magazine Stern.
Greece’s implied threat — through back channels — of looking to Russia for aid, is not without historical relevance. There has long been a vibrant Communist presence in Greece. However given the current economic environment that card doesn’t seem as if it can be played successfully.
Nothing will be accomplished today, since this is but a footnote to the drama. Yet by month’s end a compromise will be needed before a true default deadline arrives.