Tsipras courts Putin as Greece is plunged into a fresh crisis
Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin spoke last night to discuss cooperation in business and energy sectors.
The conversation took place as the country was plunged into a new crisis.
Mr Tsipras addressed parliament on the state of negotiations with lenders for aid amid a fierce backlash from his party over a proposal offered by the eurozone and the International Monetary Fund (IMF).
Speculation has cited Russia as a potential source of funding for Greece if it fails to reach a deal with EU and IMF lenders. Athens has denied plans to turn to Moscow for help.
Yesterday, Greek Labour Minister Panos Skourletis claimed the decision to bundle the IMF payments was a political one.
Although Greece is suffering a cash crunch, "today's instalment could have been paid easily. There was that possibility," Mr Skourletis said on Parapolitika radio.
Greece's left-led coalition government, elected in January on promises to end deeply resented austerity measures, has been at loggerheads for months with the country's creditors and the institutions overseeing its bailout - the European Central Bank (ECB), IMF and European Commission.
In a visit to Brussels on Wednesday, Mr Tsipras (inset) was handed a proposed deal drafted by the three institutions.
He rejected it, saying it insisted on the very budget measures his government blames for shattering Greece's economy, which has contracted by 25pc. Greece's proposals, he said, were the only credible ones.
At least two ministers suggested early elections could be an option if the creditors didn't back down.
Social Security Minister Dimitris Stratoulis described creditors' demands as "inhuman (and) degrading," such as cutting pensions to €300 a month. The only solution, he said, was for the creditors to compromise.
"If they don't back down from this blackmailing package ... the government won't back down and therefore ... it is obliged to seek alternatives," he said on Antenna television. "That means elections."
Mr Skourletis, the labour minister, also said elections were possible if Greece couldn't reach a deal, with the population being asked to decide whether they wanted to stay in the euro at any cost.
"The problem now is political," said Megan Greene, chief economist at Manulife Asset Management. "Syriza (lawmakers) seem outraged by the creditor's proposed programme, based on their public comments, which suggests Tsipras will have a very difficult time selling this reform programme to his party."
To avoid a default, Greece must clear a daunting steeplechase of repayments to the IMF. The next one had been due yesterday, but the IMF has agreed to allow this - along with three others - to be combined into one instalment of €1.5bn for payment on June 30.
Mr Tsipras will almost certainly be unable to find the money unless the troika releases some of the bailout funds that have been frozen since last August.
Before taking that step, however, they want Mr Tsipras to agree to a series of measures to raise taxes and cut spending. As they maximise the pressure on the Greek prime minister in Brussels, he faces competing demands at home.
A radical faction within Syriza, known as the "Left Platform", has run out of patience. They dislike the spectacle of Mr Tsipras effectively bargaining over which election promises to break. Instead, they want him to be prepared to walk away from the negotiations. If Greece then defaults on its debts - or even leaves the euro - then so be it.
Stathis Leoutsakos, a Syriza MP and a member of the party's central committee, falls into this camp.
He urged Mr Tsipras to reject the latest draft agreement offered by the creditors.
"The proposals put forward to the Greek side do not constitute a basis for discussion," he said. "I believe there are certain officials taking part in this who wish to - probably rightly - make a career for themselves. They see numbers. What is politically at stake, and the needs of Europe and the needs of Greece, do not concern them."
Mr Leoutsakos added that the prime minister should decline to repay the IMF. "According to my personal view, Greece must not pay the instalment," he said.
"Greece must move to suspend repayments and it must seek alternative forms of funding, even from outside the IMF, the ECB and the EU. And Greece must show that there are possibilities for a country, for a people, to survive despite the difficulties that it may encounter during the first period even outside the eurozone."
Mr Leoutsakos promised to vote against any agreement that broke the principles of Syriza's "popular mandate".
While the leaders haggle in Brussels, a Greek government dominated by the radical left risks being outflanked on the left by its own downcast supporters. (© Daily Telegraph, London)