Sunday

3rd Jul 2022

Tsipras optimistic after day of brinkmanship with EU

  • Juncker - No deal on Greek debt expected this week. (Photo: European Commission)

The Greek government is no closer to reaching agreement on its debt programme after another day of brinkmanship with its EU creditors.

Following a meeting with Austrian counterpart Werner Faymann on Monday (9 February), Alexis Tsipras said he was “optimistic” that a deal on Greece’s €240 billion international bailout could be reached.

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  • Greek prime minister Alexis Tsipras attends his first EU council summit on Thursday. (Photo: consilium.europa.eu)

“There is a common desire to resolve this crisis. I am optimistic that we will reach a compromise with our European partners," he said.

The newly-elected PM has said he wants to take out a bridging loan until the summer, to win time for a new deal on Greece’s debt.

But the mood of EU leaders has not softened to Athens’ demands, while the current bailout will expire at the end of February.

Greek finance minister Yanis Varoufakis is set to explain his economic plan to fellow eurozone ministers tomorrow in Brussels.

Speaking after a meeting of the Social Democratic party in Berlin on Monday, European Commission president Jean-Claude Juncker told reporters that "Greece should not assume that the overall mood has so changed that the eurozone will adopt Tsipras's government program unconditionally."

The Commission president added that he did not expect a deal to be struck with Syriza either at Wednesday's finance minister meeting or at Tsipras’ first EU council summit on Thursday.

Although Faymann struck a placatory tone on Monday, commenting that it was “a European obligation to seriously consider the proposals of the new Greek government,” he has ruled out the prospect of writing off any more of Greece’s debts.

For his part, German finance minister Wolfgang Schaueble told reporters outside a meeting of the G20 finance ministers in Istanbul that any agreement with Greece would require a replacement programme to be overlooked by international supervisors.

"Without a programme, things will be tough for Greece. I wouldn't know how financial markets will handle it without a programme - but maybe he (Tsipras) knows better," Schaueble said.

Meanwhile, Schaueble’s colleague Sigmar Gabriel, Germany’s economy minister, ruled out the prospect of paying any reparations to Greece from the Second World War, commenting that “the probability is zero".

In a speech to the Greek parliament on Sunday setting out his government’s economic platform, Tsipras said that his country had a “moral obligation” to claim reparations for Germany’s four-year occupation of Greece and repayment of a war-time loan which Greece was forced to pay.

The brinkmanship is increasing market fear that Greece could leave the eurozone. On Monday credit ratings agency Moody’s downgraded five of Greece’s largest banks and fears of an exit from the euro drove Greek share prices down almost 5 percent. Interest rates on the country’s three year sovereign bonds hit 18 percent.

In the UK, prime minister David Cameron convened the government’s crisis committee, Cobra, and held a special meeting with finance ministry and Bank of England officials to plan for a possible Greek exit from the currency bloc, a further sign of international anxiety about the stand-off.

Also at the G20, Canada became the latest country to urge EU leaders to agree a compromise with Greece.

Finance minister Joe Oliver said that leaders had to “arrive at a solution which will require a compromise. Greece is in financial difficulty,” although he criticised the country for having continually lived beyond its means.

The statement follows similar comments from Washington last week.

ECB ratchets up pressure on Greece

In a surprise move, the ECB on Wednesday said it will no longer accept Greek bonds as collateral for loans, giving Athens one week to agree with creditors or face cashflow problems.

Greece up for 'clash' with eurozone ministers

Greece is not excluding a clash with eurozone finance ministers on Wednesday over its plan to replace the outgoing bailout with a 'bridging programme' until September.

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