Greek PM addresses parliament about bailout talks - as it happened

Tsipras has also reiterated that he won’t accept an offer that doesn’t include debt relief for Greece -- a key demand, but one which creditors have been reluctant to embrace.

The Greek PM has also just denied that a deal must be reached within 10 days, as one opposition leader suggested tonight:

Bloomberg has a good take on Alexis Tsipras’s speech; focusing on his call for creditors to take back their ‘absurd’ demands:

Tsipras Asks Greece’s Creditors to Withdraw Latest Proposal

Prime Minister Alexis Tsipras asked Greece’s international creditors to withdraw their conditions for giving more money in a defiant address to parliament.

“The proposals from the creditors are clearly unrealistic,” Tsipras told lawmakers in Athens late Friday.

“The Greek government cannot consent to unreasonable proposals that call for devastating measures for pensioners and Greek families. I want to believe that it was a bad negotiating trick.”

The embattled Greek leader went on the attack after telling German Chancellor Angela Merkel and French President Francois Hollande on Thursday that a list of proposals set by creditors to unlock bailout funds can’t be the basis for a deal. German and French officials declined to comment on the contents of the call.

The latest proposal was an “unpleasant surprise,” Tsipras said, adding that voters are asking the government “not to succumb to the irrational, blackmailing demands of our creditors.”....More here

There’s a troubling inconsistency at the heart of Alexis Tsipras’s speech tonight. On the one hand, he emphatically rejects the proposals from Greece’s creditors (he rejects pension cuts, VAT rises on electricity, penurious budget targets)

Minutes later, he’s pledging that a deal is closer than ever before.

But he’s not about to cave in. And it’s not obvious that the IMF, ECB and EC are going to suddenly fold either. So how can a deal happen?

Pasok leader Venizelos reminds MPs that Greece will need a third bailout once its current programme expires in June:

Four years ago this month, Evangelos Venizelos was Greece’s new finance minister, as part of the left-wing Pasok administration which asked for Greece’s first bailout.

Tonight, he’s giving perhaps his final major speech as Pasok’s leader, having seen their support slump at the last election.

Venizelos criticises prime minister Tsipras for turning up tonight and asking for opposition parties to back him, rather than turning up with an actual deal.

He also questions whether Tsipras actually understands the responsibilities of being prime minister, at such a vital, troubled time in Greece’s history.

While the debate rumbles on, new opinion polling shows that Alexis Tsipras’s party Syriza remains the most popular party in Greece, well ahead of New Democracy.

Party leaders continue to address the parliament.

Panagiotis Kammenos, the leader of the right-wing ‘Independent Greeks’ party (junior partner in the coalition government) played down the importance of delaying today’s payment to the IMF.

He also pledged to support Tsipras until a good agreement has been reached.

What happens next?

Well, for all Tsipras’s defiance tonight, there’s no suggestion that the two sides will stop talking. Instead, negotiations could (and should) intensify.

G7 leaders are meeting in Germany this weekend -- Tsipras won’t be there, but we can probably expect president Obama to push Angela Merkel, Francois Hollande and Jean-Claude Juncker to sort this crisis out.

America remains very anxious that the eurozone crisis is going to blow up; memories of 2008 and the collapse of Lehman Brothers are still raw in Washington (and rightly so, those were scary days)

The FT reckons that talks between Greece and its creditors could start early next week:

Eurozone officials said talks could resume as early as Tuesday, when Jean-Claude Juncker, the European Commission president, returns to Brussels from the Group of Seven meeting in Germany and Mr Tsipras is due to join his EU counterparts for a summit with Latin American leaders.

The head of the extreme right-wing Golden Dawn party had an alarming message for Greece tonight:

Fresh from being released from his “cell of honour,” Nicholaos Michaloliakos told MPs (those who hadn’t walked out in disgust) that his party firmly opposes the old bailout deal.

“Perhaps the love affair with Europe is over?” he mused. “For five years we have lived the memorandum and look what it has achieved. Our party is firmly against the memorandum.”

Is Golden Dawn lying in wait - readying itself for Syriza to fail with its enforced embraced of austerity? Michaloliakos tonight, with his forebodingly friendly demeanour, proved once again that it is.

Here’s Reuters’ first take on Alexis Tsipras’s eagerly-awaited speech, for anyone just tuning in:

Greek PM says cannot accept “absurd” proposal from lenders

Greek Prime Minister Alexis Tsipras on Friday branded a cash for reforms proposal by his country’s creditors an “absurd” one that he cannot accept and said he hoped it would be taken back.

In an uncompromising speech to parliament, Tsipras said a proposal by Athens made earlier this week was the only realistic basis for a deal with creditors.

“The proposals submitted by lenders are unrealistic,” Tsipras said. “The Greek government cannot consent to absurd proposals.”

Nevertheless, Greece is closer to a deal than ever before since Athens’ proposal is not indifferent to the needs of the creditors, he said.

The leader of the Potami party, Stavros Theodorakis, gave a typically moderate speech in response to Alexis Tsipras’s defiant address.

Theodorakis says Tsipras should rein in members of his Syriza party from calling for a ‘rupture’ from lenders, or Greece’s exit from the euro.

More reaction to Tsipras’s speech:

Peter Spiegel, Brussels bureau chief of the Financial Times, suggests it may have alarmed the European Central Bank, which decides next week whether to keep supporting Greece’s banks...and on what terms.

But Ed Conway, Sky News economics editor, believes it was mostly posturing. A deal is still possible.

Nikos Michaloliakos, the leader of the neo-Nazi Golden Dawn party, now has the floor.

Yes, a man who is being tried over charges of running a criminal organisation, alongside his fellow MPs.

And that’s because Golden Dawn, notorious for its virulent views on immigration and gay rights, came third in January’s general elections.

Many MPs have exited the chamber.

The main opposition leader Antonis Samaras is now criticising Alexis Tsipras fiercely in his response to tonight’s speech.

The former PM says:

“You have totally destroyed the country and isolated us,”

He also questions whether a deal is imminent, and claims Tsipras’s mishandling of the situation means creditors are demanding more than in 2014, undoing his government’s hard work.

And Samaras warns his left-wing rival that he risks leading Greece to a grisly fate.

New Democracy’s leader, Antonis Samaras, is now responding. He says Tsipras has “some nerve” to challenge opposition parties to back him.

Samaras (who was prime minister until January) also criticises Tsipras’s handling of the economy. Anything you have gained through negotiations has been lost by Greece’s fall back into recession.

And Tsipras starts to wrap up, saying his first priority is to get low budget surplus targets.

And then he ends his speech with this call to arms:

“We want a deal that is economically viable and socially just.”

“This is time of responsibility for all” .

And finally....

Greek people should be proud because the government is not going to give into absurd proposals.

Some instant reaction:

Why is a deal close? Because we have international public support for our “realistic plans” and because no-one wants a “rupture”, Tsipras says.

Hand on heart, Tsipras says, I believe we are on the verge of a deal....

MPs applaud Alexis Tsipras has he pledges that Greece will not be humiliated by its lenders

He’s getting more emotive now, talking about financial ‘strangulation’

The Greek prime minister is getting into the meat of his speech.
“Let’s not kid ourselves,” he tells parliament tonight.

“The crucial point of these negotiations is not just the reforms being asked of us but stopping the self-perpetuating vicious cycle of [recession].”

That, in a nutshell, is why Tsipras’ radical left Syriza’s party was catapulted into power in January.
“What we need is not just an agreement but a solution that will stop discussions about Greece’s exit of the euro zone .... that will stop this uncertainty,” he tells the 300-seat House.
Some would argue, of course, that the posturing seen in recent months has not helped the Greek economy either.

Now the Greek PM is criticising the proposals made by Jean-Claude Juncker on Monday night (the five-page document is online here)

Tsipras says he was “negatively surprised” by what Juncker put on the table, and never believed that creditors could think that Greece’s parliament could scrap pensioners benefits, or impose higher taxes on electricity.

Another key point -- Tsipras is telling parliament that Greece needs an end to austerity, complete with debt relief.

As predicted, Tsipras is saying that Greece’s proposals is the “only realistic plan” on the table.

Tsipras’s key theme so far is that “Greece needs a solution, not just an agreement, otherwise it will never exit the long crisis”.

And that agreement must put an end to speculation that we might leave the euro.

Tsipras is now arguing that Greece has already compromised, taking on board the progress made in Brussels in recent weeks.

Oh sorry, BBC World have gone to the Weather!

Here’s your live feed in English:

It’s a pretty serious start from Tsipras.

He says his government has proved its “commitment to the European ideal” by presenting comprehensive proposals to lenders

Tsipras is telling MPs that he is determined to reach a solution to deliver “a new epoch for the European Union”.

BBC World are carrying Tsipras’s speech with an English translation, if you can get it in your area... You’re welcome, World.

Tsipras insists that he has nothing to hide from the people., We are seeking a European solution, for all of Europe as well as Greece.

The Athens parliament is pretty full. We can see Yanis Varoufakis on the ministerial benches, and New Democracy leader Antosis Samaras in front of his block of MPs.

And we’re off! Parliament is in session, with speaker Zoe Konstantopoulou outlining tonight’s debate, starting with the speech by Alexis Tsipras...

The delay is giving analysts and commentators time to speculate on what Alexis Tsipras might tell MPs:

Some new polling data just hit the Reuters terminal, showing a majority of Greeks support the government’s strategy. But more than a third think they should defy creditors:

• 05-Jun-2015 16:48:23 - GREEK POLL SHOWS 60% OF GREEKS BACK GOVERNMENT’S NEGOTIATING STRATEGY WITH LENDERS
• 05-Jun-2015 16:49:34 - 47% OF GREEKS SAY GOVT SHOULD ACCEPT LENDERS’ PROPOSAL, 35% BELIEVE IT SHOULDN’T - OPINION POLL

There’s quite a Germanic theme to the music being played on the Greek parliament channel.....

Across the eurozone, Ireland just had its credit rating raised from A to A+ by Standard & Poor’s.

S&P credited Ireland’s improved fiscal performance, state asset sales and robust economic performance since its bailout programme began in 2011.

More resolute words from another government minister:

Events seem to be running a little late in Athens; currently, a “high-spirited” committee meeting is taking place, complete with some full and frank exchanges of views..... Quite entertaining.

Tonight’s session could take a while - as Greece’s opposition leaders get to respond to Tsipras, and vice versa...

Fighting talk from Greece’s finance minister -- he’s told Newsnight’s team in Athens that the offer made by the creditors is “atrocious”, and suggests they don’t want an agreement at all.

As we wait for Alexis Tsipras and the other party leaders to begin speaking in the Greek parliament, there is another potentially important player in the drama. Channel 4’s Paul Mason explains:

Zoe Konstantopoulou, the speaker of parliament, is technically there to chair proceedings.

But while Tsipras, Yanis Varoufakis and their negotiators have been trying to get the country’s debt reduced via the IMF and ECB, Ms Konstantopoulou has been working to get it declared invalid.

Ms Konstantopoulou’s debt truth committee, set to report on 18 June, is said to be on the point of finding some of Greece’s original bailout debt, from either 2010 or 2011, was unlawfully contracted. In addition, Ms Konstantopoulou is armed with a finding from experts that Germany owes Greece €350bn in war reparations – more than the whole of its debt to Europe.

As I’ve said before, those who think the debt truth and reparations processes in Greece are “for show” are mistaken. Ms Konstantopoulou is piling up, effectively, a mega legal claim amounting to hundreds of billions that would be lodged in Europe’s various international courts.

In recent days her efforts have been boosted by a finding by a United Nations expert on human rights that Greeks’ “economic and social rights” had been undermined by the IMF/EU imposed austerity.

Full piece here:

Greece: will Alexis Tsipras waive a writ at Europe?

Not surprisingly, with the uncertainty over Greece’s future in the eurozone growing following its plan to delay paying the IMF, the country’s banks are taking a hit.

With the Athens general composite index now down 4.96%, most of the big fallers are financial shares. Pireaus Bank is down nearly 14%, National Bank of Greece is off nearly 11% and Alpha Bank is down 9.6%.

Greece’s creditors are trying to make the country sign up to a programme which has already proved to be a failure, argues economist Joseph Stiglitz in a Project Syndicate piece for the Guardian:

EU leaders continue to play a game of brinkmanship with the Greek government. Athens has met its creditors’ demands more than halfway. Yet Germany and Greece’s other creditors continue to demand that the country sign on to a programme proven to be a failure, and that few economists ever thought could, would, or should be implemented.

The swing in Greece’s fiscal position from a large primary deficit to a surplus was almost unprecedented, but the demand that the country achieve a primary surplus of 4.5% of GDP was unconscionable. Unfortunately, at the time that the “troika” – the European commission, the European Central Bank and the International Monetary Fund – first included this irresponsible demand in the international financial programme for Greece, the country’s authorities had no choice but to accede to it.

The folly of continuing to pursue this programme is particularly acute, given the 25% decline in GDP that Greece has endured since the beginning of the crisis. The troika badly misjudged the macroeconomic effects of the programme they imposed. According to their published forecasts, they believed that, by cutting wages and accepting other austerity measures, Greek exports would increase and the economy would quickly return to growth. They also believed that the first debt restructuring would lead to debt sustainability.

The troika’s forecasts have been wrong, and repeatedly so. And not by a little, but by an enormous amount. Greece’s voters were right to demand a change in course, and their government is right to refuse to sign on to a deeply flawed programme.

And he concludes:

Europe’s leaders viewed themselves as visionaries when they created the euro. They thought they were looking beyond the short-term demands that usually preoccupy political leaders.

Unfortunately, their understanding of economics fell short of their ambition; and the politics of the moment did not permit the creation of the institutional framework that might have enabled the euro to work as intended. Although the single currency was supposed to bring unprecedented prosperity, it is difficult to detect a significant positive effect for the eurozone as a whole in the period before the crisis. In the period since, the adverse effects have been enormous.

The future of Europe and the euro depends on whether the eurozone’s political leaders can combine a modicum of economic understanding with a visionary sense of, and concern for, European solidarity. We are likely to begin finding out the answer to that existential question in the next few weeks.

The full piece is here:

A quick update on the markets.

Wall Street is lower in early trading following the better than expected non-farm payroll numbers - which hint at a possible rise in US interest rates later this year - but it is off its worst levels.

The Dow Jones Industrial Average is currently down 11 points or 0.06%, which has helped the UK market recover some ground. The FTSE 100 is down 41.19 points at 6818.05 having fallen as low as 6785 on concerns about the financial crisis in Greece.

The Athens market is still under pressure, down 4.8% and other European markets have also fallen again, with Germany’s Dax down 0.92%.

Oil is also volatile despite Opec deciding to keep production levels unchanged.

The US Federal Reserve could raise rates in July or September, reckons Rob Carnell of ING Bank in the wake of the better than expected non-farm payroll numbers. He said:

Just when all the Fed speakers were sounding more and more cautious, in comes a strong labour market report and puts thoughts of tighter policy back on the agenda.

The headline non-farm payrolls gain was 280,000, higher than the 226,000 consensus (ING forecast 240,000), and comes with some nice upward revisions to previous month’s data (up 32,000) that make this an even better looking number.

There was an unexpectedly good wages growth number too, with 0.3% month on month growth in hourly wages taking wage inflation for the year up to 2.3% year on year, which it last touched briefly in August 2013, and then again for one month in July 2011. Other than these brief spikes, wages growth has not been 2.3% or above since 2009. With the pool of available labour having shrunk in each of the last four months, we may now have the conditions in place for a sustained, though modest uptrend in wages growth.

We are not too bothered by the tick up in the unemployment rate to 5.5%. This owes more to a 397,000 rise in the labour force, which lifted the numbers of unemployed by 125,000. But this distorts what is clearly a positive picture, and we think it will be swiftly reversed in coming months. The broad measure of unemployment (U6) remained unchanged at 10.8%.

Taking all of this together, it remains difficult to see the Fed changing rates in June – they have almost already ruled it out in the May FOMC minutes and elsewhere, and we think we need to see the labour market data supported with other non-labour activity improvements first.

But assuming that these are forthcoming, a third quarter 2015 rate hike still looks a decent bet, and could be either July or September. We don’t think the FOMC will be substantially moved by recent comments by the IMF’s Christine Lagarde, namely that rate hikes would be better left until 2016. The Fed sets monetary policy for the US, not for the rest of the world.

The stronger than expected non-farm numbers is also hitting the bond markets:

The higher non-farm numbers of course mean that people are immediately speculating that this gives the US Federal Reserve more fuel to raise interest rates this year (despite what the IMF advised on Thursday).

So the dollar has climbed, with sterling falling a cent to $1.522.

The full report from the Bureau of Labour Statistics is here.

Some sobering lunchtime viewing: an insight into the impact of Greece’s financial crisis on its people, from Sky News’s Ed Conway and Emily Purser.

Well worth watching, especially if you’re trying to get an insight into Greece from abroad (those of you reading in Greece already know the picture better than me, of course)

The FT’s also has a good story about Greece’s debt restructuring hopes, which I shamefully failed to plug early this mornig.

This is a crucial part of Athens’ plan for a comprehensive debt deal, but there’s no mention of it in the latest demands from creditors.

The FT’s Peter Spiegel has seen the document, and explains:

The restructuring plan is ambitious, offering ways to reduce the amount of debt held by all four of its public-sector creditors: the European Central Bank, which holds €27bn in Greek bonds purchased starting in 2010; the International Monetary Fund, which is owed about €20bn from bailout loans; individual eurozone member states, which banded together to make €53bn bilateral loans to Athens as part of its first bailout; and the eurozone’s bailout fund, the European Financial Stability Facility, which picks up the EU’s €144bn in the current programme.

If all the elements of the new plan are adopted, the Greek government reckons its debt will be back under 60 per cent of GDP – the eurozone’s ceiling agreed under the 1992 Maastricht Treaty – by 2030, as this chart from the document shows:

It’s certainly an ambitious proposal to deal with Greece’s debt mountain (although some of the ideas have been proposed before)

It includes perpetual bonds (ie, debt that produces an income but is not repaid), and GDP-bonds (where the interest rate is pegged to Greece’s recovery).

It also involves eliminating a chunk of Greece’s bailout debt, in return for doubling the interest rate on another chunk. That write-off would cut Greece’s debt burden, and is thus politically unpalatable to much of Europe.

But without such a radical plan, can Greece ever get its debts down to sustainable levels?

Although Greece has bought itself some time, it now faces a mountain of financial demands from 30th June to mid-July:

So, how many countries have actually failed to repay the International Monetary Fund on time?

My colleague Alberto Nardelli has the answer - 32 countries have fallen at least six months into arrears with their IMF bills, from Cuba in 1959 to Zimbabwe in 2001.

And it has usually been prompted by a very serious crisis:

What is evident browsing through this list, from Cuba and Cambodia to Sudan and Yugoslavia, is that many of the countries that are on it were characterised primarily by domestic or regional violence, if not by outright war, during the years in question.

The German finance ministry has just revealed that Greek finance minister Yanis Varoufakis has asked to meet with his counterpart in Berlin, Wolfgang Schäuble, on Tuesday.

Spokesman Martin Jaeger just told reporters that:

“We’re looking into it...There’s been a request (from Greece) for a meeting but we haven’t been able to find a time yet. We’ll let you know on Monday.”

Greek worries are keeping Europe’s stock markets in the red, but it’s not a major selloff:

Investors are waiting to see Alexis Tsipras’s next move.

Rabobank strategists say:

“With uncertainty about Greece repaying or not repaying the IMF today out of the way ... markets may focus on the political fall-out from this decision.”

And Royal Bank of Scotland reckons Greeks could soon be heading back to the polling booths (as minister Dimitris Stratoulis suggested this morning).

Greece’s Mega TV is reporting that Alexis Tsipras is planning to speak with Russian president Vladimir Putin today:

We’re looking into it.....

Western politicians have been fretting that Greece could turn to Moscow to help with its financial plight, at a time when Russia is barred from this weekend’s gathering of world leaders at the G7 summit.

Brussels insiders have backed up economy minister George Stathakis’s claim that the International Monetary Fund suggested bundling Greece’s June repayments into a single bill.

They’ve told the Guardian that the IMF proposed the option but didn’t receive a reply - before learning last night that this bargaining chip had been played.

A senior EU official has just insisted that the Greece crisis will not be on the agenda at the G7 summit on June 7th and 8th in Schloss Elmau, Germany.

Officially, the leaders of Germany, France, the UK, US, Japan, Canada, Italy and the European Union will discuss the global economy, along with foreign, security and development policies.

Other issues will include “Protection of the marine environment”, antibiotics and the Ebola outbreak, and energy security.

But European Commission president Jean-Claude Juncker has just admitted that the Greek crisis will “preoccupy him” this weekend. He’ll be at Schloss Elmau along with European Council president Donald Tusk.

At one stage yesterday, we thought Alexis Tsipras would meet Juncker in Brussels today. That’s been superseded by the debate in parliament tonight.

The Athens stock market has fallen by over 3% in early trading.

Financial shares are among the big fallers, with Piraeus Bank, National Bank of Greece and Eurobank all shedding at least 5%.

Greek government bonds are tumbling in value this morning.

Investors are rushing to sell, following the decision to delay today’s €300m IMF repayment.

That is driving up the yield, or interest rate, on Greek debt, as this chart shows:

Here’s another key quote from Greek economy minister George Stathakis on the Today Programme this morning:

“We are looking forward to getting a deal as soon as possible.

The Greek government cannot accept these new proposals put on the table.”

Theodoros Fessas, the president of The Association of Greek Industries, is also speaking on Radio 4’s Today Programme.

He says the demands being made by Greece’s creditors are “quite high”, and contain “harsh” measures.

The key to reviving Greece’s fortunes is to improve its tax system, Fessas insists.

All the past governments have not been efficient or effective at collecting taxes.

And that means the burden on those who pay taxes is rising higher and higher, he argues.

George Stathakis says that the Greek government is not prepared to accept the proposals tabled by its creditors this week (when Alexis Tsipras met Jean-Claude Juncker in Brussels on Monday night).

He cites the primary surplus targets which lenders are pushing for (including a 1% primary surplus this year; Greece believes only 0.6% is achievable).

The BBC’s European Editor, Katya Adler, has also heard that Greece had the money to repay the IMF today, but chose not to (as our Helena Smith reported last night).

Adler is telling the Today Programme now that the delayed repayment is being seen as a political jesture:

It is being seen as Greece saying to the international creditors, don’t push us, we’d rather snap than bend.

As feared, Europe’s stock markets are being hit by Greek worries.

The FTSE 100 has dropped by 35 points at the start of trading, to 6824, which I think is a one-month low. More to follow.....

Greece’s economy minister, George Stathakis, is about to discuss the situation on Radio 4’s Today Programme. You can hear it live here.

Despite the turmoil of recent years, most Greeks still want to remain in the eurozone:

We’re not sure what the “other” option would be....