Greece fires default warning but rules out capital controls

According to Greek government officials, progress was noted in technical talks at Brussels Group level over the weekend ahead of their resumption Tuesday.

In fact, a draft agreement is already being written, according to sources, despite the fact that there are still major differences over a series of issues (VAT, primary surplus, instalments for debts to the state, auxiliary pension cuts, labour relations). Agreement appears to have been reached on the issues of the unified property tax, the solidarity tax and raising the tax on luxurious living.

However, the IMF still appears to be a major stumbling block to an agreement being reached. Therefore, considering Greece’s cash crunch, the government could ask the Fund to repay its upcoming debts in one large instalment at a later date than due.

The news of Greece not being able to afford to repay IMF on schedule made international news headlines on Monday. The stories are based on the statement of interior minister Nikos Voutsis on Sunday who said that “Greece cannot make debt repayments to the IMF next month unless it achieves a deal with creditors”.

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