Greece ready to pay debts, but flirting with Moscow

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.