The leaked IMF document seen by Channel 4 News last weekend effectively signals a three-week endgame in the Greek debt stand-off.

The IMF thinks there is “no possibility” that Greece can meet €11bn worth of debt repayments due between June and the end of August.  The Greek government is running out of cash.

Yanis Varoufakis, the finance minister, told Channel 4 News last night (see video below) that faced with the choice of paying €350m due on 5 June to the IMF on 5 June, or paying pensions and salaries, he would choose the latter.

Privately, those within the ruling far-left party Syriza who were once confident of reaching a compromise with lenders, are now alarmed. Euro exit plans drawn up by the far left of the party are being studied seriously by those previously dismissive of them; articles contemplating a debt default have begun to appear in the party’s daily paper Avgi.

In the script according to the eurozone, the expected ending is: Syriza splits; finance minister Varoufakis makes good his pledge not to sign a surrender and resigns. A government of the centre-left forms, with Alexis Tsipras now allied to the centrist Potami party and with tacit support from a liberal wing of the New Democracy party. Debt relief happens, but on the terms dictated by the lenders, and Syriza survives to complete its mutation into a centre-left social democratic party.

Not sticking to the script

However, there are some who are not sticking to that script.

Zoe Konstantopoulou, a 39-year-old, Sorbonne-educated human rights lawyer who is now the speaker of the Greek parliament, is among them.

The Syriza MP has used her office set up three legal processes that could, even now, give the radical left government leverage over its lenders: a “debt truth” committee, a committee to oversee Greek war reparations claims against Germany, and a pipeline of high-level corruption cases targeted around public sector contracts with German firms.

It had been assumed in Europe that these initiatives were rhetorical, allowing Syriza to construct a narrative in government and nothing more.

Now I understand the debt truth committee has identified a tranche of Greek debt that looks – according to those who’ve seen the evidence – “unconstitutional”. Ms Konstantopoulou told me:

“There is strong evidence on the illegitimacy, odiousness and unsustainability of a large part of what is purported to be the Greek public debt.”

She warned creditors that the Greek people have the right “to demand the writing-off of the part which is not owed.”

“Pending the audit, it is unethical on the part of creditors to demand further payments while refusing disbursements and at the same time exercising extortionate pressure for the implementation of policies contrary to the public mandate,” she said.

Legal proceedings?

If the Greek parliament – not the government – were to launch legal proceedings, not only demanding write-offs and reparations but demanding the Greek government unilaterally cancel parts of the debt, that would take matters out of the hands of Syriza ministers.

“Claiming the abolition of the unsustainable part of the debt and demanding the reparations is not a matter of prerogative,” MS Konstantopoulou told me: it is a legal duty.

Though not well known in the Anglosphere, Ms Konstantopoulou is being touted among some Syriza members and MPs as a potential figurehead for opposition to the coming deal. In the past month she has toured European capitals to make Greece’s case – standing alongside Vladimir Putin at the Russian V-Day parade on 8 May.

Yesterday, as pensioners were blocked from approaching parliament by riot police, Ms Konstantopoulou stormed out of her office and confronted the police commander, live on TV. You don’t have to understand Greek to get the gist:

The symbolism was not lost on the Greek press this morning (see illustration below).

The lenders, and the centre-right in Greek politics, have calculated – correctly up to now – that the Greek lower middle class is so wedded to euro membership that a Syriza goverment that risked it would face revolt.

But on the ground things are shifting. The three months since Mr Varoufakis made what he thought was a deal that could unblock Greece’s frozen banking system have sapped people’s energy. More than €35bn has drained from the banking system.


And though recent opinion polls have found a majority in favour of staying in the Euro, 70 per cent said it should not come at the cost of giving in on the so-called “red line” issues of pension entitlements, trade union rights and reinstating laid off workers.

Those saying “stay in at all costs” are now down to 52 per cent.

The hard left of Syriza is already pushing a “negotiated” euro exit plan launched publicly this week by London University professor and Syriza MP Costas Lapavitsas.

But in the weeks since the Riga summit, the main body of the party’s membership, and many of its influential journalists, have begun seriously to debate the merits of a default and exit strategy.

To the European officials trying to seal a last-minute deal, it is now no longer just the obstinacy of Germany and its allies in the ECB that they have to worry about.

They also have to anticipate the threat of a wider revolt within Syriza, and the actions the debt truth committee, both of which could throw a spanner into the works of any agreement.

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