by Our Foreign Desk

GREEK ministers warned yesterday that the government might ditch the euro if the country’s creditors did not drop austerity demands.

The announcement came after Greece postponed a looming €300 million (£220m) IMF loan repayment due yesterday. On Thursday the Syriza government asked the IMF to bundle together its four debt installments due this month into a single €1.6 billion (£1.2bn) payment, gambling on the prospect of an elusive compromise with foreign creditors.

But so far the terms of such a deal have been unacceptable to Syriza, which was elected in January on the promise that it would oppose further austerity cuts to public services, jobs and pensions that have shrunk the economy by 25 per cent.

Prime Minister Alexis Tsipras was due to brief parliament on the course of the stalemated talks in an emergency session yesterday evening. He rejected a proposal from creditors on Wednesday, calling it a demand for the very austerity measures that impoverished his country.

At least two ministers suggested that early elections, seeking a popular mandate for an exit from the euro, could be an option if the creditors maintained their hard line. Social Security Minister Dimitris Stratoulis said creditors’ demands, such as cutting pensions to €300 (£218) a month, were “inhuman and degrading.”

“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 told television reporters. “That means elections.” Labour Minister Panos Skourletis agreed.