Roundup: Greek warning of default triggers wide media attention in Italy

Greece's recent warning that the country might default its loan instalments to the International Monetary Fund (IMF) in June triggered wide media attention in Italy on Monday.

"The four instalments to the IMF in June amount to 1.6 billion euros (1.76 billion U.S. dollars). This money will not be given. There is no money to repay them," Greek Interior Minister Nikos Voutsis said on Sunday.

Major Italian newspapers devoted worried reports to the news, trying to figure out whether it might prompt a failure in the on-going strained negotiations on the Greek debt crisis, and what this would mean for both Athens and the euro-zone countries.

"A Greece minister says his country will default in June, and no comment comes from Brussels," EU correspondent Andrea Bonanni with La Repubblica newspaper wrote.

In the last four months, Greece has been locked in negotiations with the European Central Bank (ECB), the EU Commission, and the IMF over a plan of economic reforms that its international creditors want to see implemented in order to unlock a residual 7.2-billion-euro tranche of an overall 240 billion euros bailout.

The next repayment deadline is set on June 5. If Greece sticks to its announcement of no payment, there are fears the country could default on its loans.

However, Greece's latest warning did not really come as a surprise, Italian media said.

According to La Repubblica, the EU monetary diplomacy would be feverishly at work behind the official silence to try and reach an agreement to avoid Greece's default, and substantial progress would have been made after the Greece's team handling the talks with lenders had been reshuffled.

"Plus, another game is being played behind the scenes involving the role of EU Commission president Jean Claude Junker," Bonanni pointed out.

Tsipras met alone with German Chancellor Angela Merkel and French President Francoise Hollande at the EU meeting in Riga on May 21-22, without Junker being invited. That meeting ended very badly, and Tsipras was given an ultimatum urging Greece to accept all the lenders' conditions by the end of May, the correspondent explained.

Some observers saw it as part of a EU strategy, while others interpreted it as a signal of France and Germany's distrust towards Junker's Commission for being too soft with Athens.

"Anyway, that 'cold shower' in Riga brought about a widely expected result: the stiffening of Greece and its resorting to the explicit threat of default," Bonanni wrote.

"This move could now gets Junker back into the game as mediator in extremes, a role he has played several times, and with great ability."

Italy's leading business daily Il Sole24 Ore wondered how real a so-called "Grexit" would be.

"The Athens' threat is no deception for the markets. What are the chances for Greece to leave the euro?" the newspaper headlined.

Athens would be no longer willing to agree on further concessions in negotiations, since this would clash with the electoral mandate Tsipras received in January, the paper noted.

"At this point, it is worth asking what is the most likely scenario that investors assume," financial reporter Vito Lops wrote.

An Italian financial analyst answered by saying that "the markets start believing tensions in Greece are not a bluff, but a serious threat."

"The fears of a possible Grexit will have a greater impact on the euro, since (financial) markets are still supported by the European Central Bank's liquidity injections," the analyst told Il Sole 24Ore. (1 euro = 1.10 U.S. dollars) Endit