Wednesday

6th Jul 2022

Tsipras 'optimistic' after first EU meetings

  • Juncker kissed Tsipras and held hands, but would not say much after the meeting (Photo: European Commission)

After half a day of meetings with EU top officials in Brussels on Wednesday (4 February,) Greek prime minister Alexis Tsipras said he is "optimistic" about reaching a deal with the EU on his country's debt repayments.

Speaking in the European Parliament alongside its chief Martin Schulz, Tsipras said: "I know the history of the EU is a history of disagreements, but in the end of compromise and agreements."

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He climbed down from previous statements about cancelling Greece's debt and "tearing up" the memorandum of understanding with international creditors.

"We respect the rules of the European Union, we want to re-correct this framework, not to smash this framework. And we believe that in this framework, we could find a common, viable solution," Tsipras said.

Schulz praised him for reaching out to his European partners and "fighting for European co-operation, not for Greek separation".

"I am very optimistic after today that both sides are fighting for mutual understanding - the Eurogroup and the new Greek government - and we must find ways for compromise," Schulz said.

But he also admitted there is a "difficult time ahead" before clinching a deal and that the "necessary solutions" have not yet been attained.

A similar message came from EU council chief Donald Tusk, who after meeting Tsipras said in a written statement that negotiations on Greece's financial assistance can only take place in the Eurogroup (eurozone finance ministers).

"They will be difficult, will require co-operation and dialogue as well as determined efforts by Greece," Tusk said, noting that the discussion with Tsipras was "open and frank" - the polite code for disagreements.

"We agreed on the importance of unity within the European Union with regard to other key challenges facing Europe," Tusk added, in a veiled reference to Russia and Ukraine.

Last week, when the Syriza government had barely taken power, it got in a row with Tusk's office after saying it wasn't consulted when Tusk put out an EU statement blaming Russia for a rocket strike on the Ukrainian city of Mariupol.

Syriza's Russia-friendly stance raised concerns in Brussels, particularly after statements made by Russian officials that Greece may be bailed out by the Kremlin.

Tsipras however reassured Tusk that Greece will stay on the same page as other EU states on Russia sanctions.

Russian aid a no-go

Meanwhile, in Frankfurt, Greek finance minister Yanis Varoufakis said after a meeting with the European Central Bank (ECB) supremo, Mario Draghi, that his country "will never ask for financial assistance in Moscow".

He said his meeting with Draghi was "constructive" and that negotiations with the other eurozone governments, the ECB and the International Monetary Fund will not last very long.

This is an indication that Varoufakis no longer expects an extension of the current bailout, which runs out at the end of February. Last week, he was still hoping to get a few more months and reach a deal by May.

Die Welt quoted ECB sources saying that the bank is willing to increase the emergency funding for Greece's banks, but only for a two-week period. Three of the country's four major banks are tapping into this emergency funding, as depositors are panicking and pulling their money out of the banks.

German demands

The key to a quick deal lies in Berlin, however, and German chancellor Angela Merkel is in no rush to meet the new Greek PM.

On Wednesday she said she is "looking forward" to meeting Tsipras at an EU summit on 12 February, an indication she is not scheduling any bilateral meetings with him beforehand.

Tsipras came to Brussels after a stop in Rome and before seeing the French president, Francois Hollande, later on Wednesday.

Merkel said that she spoke on the phone with Hollande and the Italian PM to co-ordinate their positions on Greece.

“I don’t think that the positions of the member states within the euro area with regard to Greece differ, at least in terms of substance,” she told reporters in Berlin on Wednesday.

Lion's den

The German government is, however, in contact with the Syriza team. On Thursday, Varoufakis is expected in Berlin for a meeting with his German counterpart, Wolfgang Schaeuble - a staunch opponent of debt restructuring.

According to a draft paper seen by Reuters, Germany wants the new Greek government to abandon its promises made when elected into power: to roll back austerity measures, re-hire state employees, and stop privatisations.

The document was prepared in Berlin for a meeting of senior eurozone finance officials on Thursday, with the possibility for an emergency Eurogroup to be held next week.

It calls for "full implementation of key reforms" pledged under the current bailout. Some of the measures coincide with what Syriza has pledged to do anyway: improve tax collection, fight tax evasion and go after corruption and vested interests.

But it also insists that privatisations should be pursued and public administration and pension reforms maintained - a sore point for Syriza.

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