Greece financial worries growing as repayment deadlines loom

Greece has to repay another 750 million euros to its creditors on 12 May. After that, the country still has to cough up 11.5 billion euros in bonds and refinance another 10.6 billion in treasury bills, as it hopes its reform plans will finally release the remaining 7.2 billion euros in its EU-IMF bailout. But chances for a favourable outcome are getting slimmer by the day. 

Angela Merkel and Alexis Tsipras in Berlin in March Reuters/Hannibal Hanschke

At home, the Greek government is increasingly struggling to get money together to pay for its overhead, the salaries of its state employees and basic services.

Leonidas Vatikiotis, an economist from the Varna Free University in Athens, stresses that there is a lot at stake.

“Now, the Greek debt is 175 per cent of gross domestic product. That comes down to 324 billion euros,” he tells RFI. “The Greek debt is out of control due to troika policies, due to austerity, due to the very strict terms of the memoranda that were imposed the previous years since 2010 … with the then-government of Papandreou.

“Five yeas ago, the debt of Greece was 115 per cent of its GDP. During our 'rescue' the debt has been increased by more than half,” Vatikiotis says.

On 12 May, Greece has to pay 750 million euros. But Vatikiotis clearly does not agree with this requirement: “There have been very tough negotiations between the Greek government after it came to power in January. But the government of Alexis Tsipras has made too many compromises.”

More deadlines are looming. In June, Greece faces five deadlines to pay between 90 and 550 million euros each time.

Meanwhile, calls for German war reparations have grown stronger. On 7 April, the Greek minister of finance said Germany owes Greece 279 billion euros in damages, forced loans and inflations.

The calls have grown stronger as Greek public opinion has moved against Germany’s perceived unwillingness to soften demands for austerity.

“It is a very just demand,” says Vatikiotis. “Greece has suffered immensely in the occupation by Nazi Germany.

“And now Germany rejects any demand to pay for all these damages. There was a loan that Germany during the occupation took from the bank of Greece and Hitler had recognised this loan. A loan that was recognised by Hitler is not recognised by Merkel and all the previous chancellors of Germany.”

Still, reparations are a long shot, he says.

“Maybe that some of the former Greek governments had some advantages or benefits from their silent agreement to this treaty, but I don’t think the Greeks have a chance to pick this issue up and bring it to court.”