Saturday

7th Dec 2019

Greece ready to pay debts, but flirting with Moscow

  • Greek prime minister Tsipras (c) might be in for a gas discount in Moscow on Wednesday (Photo: consilium.europa.eu)

Greece reassured its lenders on debt commitments over the Easter weekend, but is continuing to cast doubt on its long-term relationship with the EU ahead of a visit to Moscow by prime minister Alexis Tsipras.

Finance minister Yanis Varoufakis met with International Monetary Fund chief Christine Lagarde in Washington on Sunday (5 April) and assured her that Greece would "meet all obligations to all its creditors, ad infinitum".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

Greece must repay a €450 million loan to the IMF on Thursday (9 April), amid fears that it would run out of money by that date.

Interior minister Nikos Voutsis warned earlier last week that if the country had to choose between paying the IMF back and paying salaries and pensions, it would choose the latter.

His declaration, suggesting that Greece could default, fueled speculations over contingency measures such as capital controls, nationalisation of banks, and issuance of IOUs to temporarily replace the euro.

But in an interview with Greek newspaper Naftemporiki, Varoufakis swept aside talks of default or Grexit.

"Anyone who examines such plans or discusses even their prospects offers very bad services to Europe," he said.

Varoufakis added that Greece now expects a funding agreement with its Eurozone partners on 24 April.

"At the Eurogroup [meeting] of April 24 there must be a preliminary conclusion [of the talks], as per the Eurogroup accord on February 20," he said, referring to an accord extending the €240 billion Greek bailout on condition that Greece presents a list of reforms.

The list was presented last Wednesday to the European Commission, the European Central Bank and the IMF. It will be discussed by Eurozone deputy finance ministers this week.

If it is satisfactory, it could then be validated at the next ordinary Eurogroup meeting on 24 April. Eurozone finance ministers would then unblock a €7.2 billion tranche of funds.

The list of reforms is said to include measures to fight tax evasion, privatisations of state assets, and labour reforms.

Greek government sources denied on Monday (6 April) that the list included an increase on VAT for touristic Greek Islands and that Lagarde had requested a cut in early retirement pensions.

"Our government is a reformist government, we are intent upon reforming Greece deeply," Varoufakis said in Washington.

But in his interview to Naftemporiki, the finance minister warned that Greece would not accept anything other that what it considers an "honorable agreement".

"We are not going to condemn the country, as previous governments did, to long-term credit squeeze by accepting terms and measures that guarantee such a prospect," he added.

Moscow visit

As if to demonstrate that it could find alternative solutions to a EU deadlock, Greece is openly nurturing links with Russia and China.

On Wednesday (8 April), prime minister Alexis Tsipras will meet Russian president Vladimir Putin in Moscow.

The two leaders will discuss relations between the European Union and Russia, tourism, energy, investment and trade.

Tsipras will is try to get an exemption for Greek fruits from the Russian ban against EU agricultural products.

Russia’s Kommersant daily reported on Tuesday that Russia could also offer Greece a discount on gas deliveries.

Sanctions and gas prices are two areas where Russia has been trying to weaken European unity.

Greece also proposed a three-year co-operation plan with China that would involve ports, ship building and repair, credit, supply chain and culture, according to Greek newspaper Kathimerini.

In his interview with Naftemporiki, Varoufakis defended the Greek "pivot" to Russia and China.

"As I have said several times before, the solution to the crisis of the Greek social economy is an issue for the European family and must be found within the EU framework," he said.

"Forging closer relations with countries outside Eurozone and the EU, which have common interests with Greece, and the will to promote them on the basis of cooperation and mutuality, is an entirely different chapter," he added.

At the same time, the Greek government is maintaining a tough line on the German war debt issue.

At a parliamentary committee meeting on Monday, deputy finance minister Dimitris Mardas estimated at €278.7 billion the amount Germany should pay to Greece as reparation for war crimes and repayment of a forced loan during World War II.

Germany has already rejected such claims. The issue has been a cause of tension between the two countries since Tsipras came to power in January.

Clock ticking as Greece continues talks with creditors

Talks between Greece and its creditors are continuing with just over a week to go before Greece is due to make a payment to the IMF and amid uncertainty over how much cash the government has left.

Time running out for Greece, warns euro commissioner

Time is running out for Greece to broker a compromise that will allow it unlock the remaining €7.2 billion in its EU-IMF bailout needed to avoid a default, the bloc’s eurozone commissioner has said.

News in Brief

  1. Greece denies access to fair asylum process, report says
  2. Report: Self-regulation of social media 'not working'
  3. Turkey: Greek expulsion of Libyan envoy 'outrageous'
  4. Merkel coalition may survive, says new SPD co-leader
  5. Von der Leyen Ethiopia visit a 'political statement'
  6. Over 5,500 scientists ask EU to protect freshwater life
  7. Iran defies EU and UN on ballistic missiles
  8. Committee of the Regions: bigger budget for Green Deal

Agenda

UK election plus EU summit in focus This WEEK

EU leaders will try to agree on the 2050 emission-free target - but they will deeply disagree on EU spending over the next seven years. Meanwhile the UK will elect its new political leadership.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Russia makes big promises to Arctic peoples on expansion
  2. UK election plus EU summit in focus This WEEK
  3. Migrants paying to get detained in Libyan centres
  4. Searching for solidarity in EU asylum policy
  5. Will Michel lead on lobbying transparency at Council?
  6. Blood from stone: What did British PR firm do for Malta?
  7. EU Commission defends Eurobarometer methodology
  8. Timmermans warns on cost of inaction on climate

Stakeholders' Highlights

  1. UNESDAUNESDA appoints Nicholas Hodac as Director General
  2. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  3. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  4. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  5. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  6. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues

Join EUobserver

Support quality EU news

Join us