Friday

1st Mar 2024

France, US support Greece in debt battle

  • Schulz (l) to Tsipras: Tone down the anti-Merkel rhetoric (Photo: europarl.europa.eu)

Paris and Washington have expressed support for Athens’ attempts to renegotiate the terms of its bailout, as Germany comes under increasing pressure to reconsider its approach to austerity in the eurozone.

French finance minister Michel Sapin on Sunday (1 February) met the new Greek finance minister, Yanis Varoufakis, and reiterated that there is no question of annulling Greece's debt, but said a “delay” could be considered.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"No, we will not annul. We can discuss. We can delay," he said on French TV Canal Plus after they spoke.

"That the government would like to discuss ways to reduce the weight of this debt and the reimbursement of this debt, that appears legitimate to me," he added.

US president Barack Obama also entered the debate by urging the eurozone to look at how the US returned to growth.

“Fiscal prudence is important. But what we’ve learnt in the US experience … is that the best way to reduce deficit and to return to fiscal soundness is to grow.

“You cannot keep on squeezing countries that are in the midst of depression,” he told CNN.

Varoufakis, for his part, said Greece is "not going to ask for any new loans" and that his government will seek a deal with international creditors "by end May".

This is based on the assumption that the European Central Bank (ECB) will keep emergency funding flowing - something the Frankfurt-based bank has not confirmed.

Currently, the ECB provides Greek banks with emergency cash because the country is considered to be compliant with bailout requirements.

But if Athens is in breach of those commitments, the ECB could pull the plug.

“There will be no surprises if we find out that a country is below that rating and there’s no longer a programme that that waiver disappears,” ECB vice president Vitor Constancio said on Saturday in Cambridge, UK.

Varoufakis' stop in Paris came before a tour by the new Greek prime minister, Alexis Tsipras, of Paris, Rome, and Brussels this week as he tries to assure European partners that Greece will stick to its commitments.

Tsipras and his government are trying to negotiate a deal on the exit from the bailout programme which should have ended in December, but which was extended until the end of February to wait for elections to take place.

European Parliament chief Martin Schulz - a German Social Democrat who has often criticised the austerity policies of chancellor Angela Merkel - told Die Welt that Tsipras should tone down his anti-Merkel rhetoric.

"Tsipras is well-advised if he ends his attacks on Angela Merkel. In the end it is also the German government who will have to help him. And it is not only the Germans who look sceptically at the developments in Athens, but the entire EU," the EU politician said.

Schulz, who visited Athens last week and met Tsipras, said that he didn't get the impression Tsipras had a clear idea of where he was heading.

"I was very clear: He has full support from Brussels if he is serious about fighting tax evasion and tax avoidance, and if he makes sure that not only little people are paying the price of austerity, but also the rich who took their money out of the country in the darkest hours of the crisis," Schulz said.

But he told Tsipras he would be wrong to think that "he can send the troika [of international lenders] back home and that the Europeans are still going to fund his election promises."

"That's why I advised him not to question the rules that have been agreed or to scrap them unilaterally," Schulz added.

Merkel herself told a German newspaper, Hamburger Abendblatt, that Greece already had its debt reduction in 2012, when private creditors agreed to slash billions off its burden.

"I do not envisage fresh debt cancellation," she said.

"The aim of our policy was and is that Greece remains permanently part of the euro community. Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis, if these countries carry out reforms and cost-saving measures," she added.

Greece flip-flops on troika talks

Greek finance minister Yanis Varoufakis has denied previous statements that Greece will no longer deal with the troika of international creditors following icy talks with the head of the Eurogroup.

Greece equivocates on Russia bailout

The new Greek leader has said he isn’t interested in Russian aid “right now”, in a comment seen by some analysts as being deliberately ambiguous.

Opinion

Hope and fear: Greeks after the Syriza victory

Many Greeks are finding a new sense of national pride in Tsipras' hard stance towards "foreign interests", but where will he find the money to run the country or pay its debts?

EU Commission clears Poland's access to up to €137bn EU funds

The European Commission has legally paved the way for Poland to access up to €137bn EU funds, following Donald Tusk's government's efforts to strengthen the independence of their judiciary and restore the rule of law in the country.

Latest News

  1. Why are the banking lobby afraid of a digital euro?
  2. Deepfake dystopia — Russia's disinformation in Spain and Italy
  3. Putin's nuclear riposte to Macron fails to impress EU diplomats
  4. EU won't yet commit funding UN agency in Gaza amid hunger
  5. EU Commission clears Poland's access to up to €137bn EU funds
  6. Right of Reply: The EU-ACP Samoa agreement
  7. The macabre saga of Navalny's corpse
  8. Belgium braces for Flemish far-right gains, deadlock looms

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us