Leader of the Greeks vows to pay nation’s debts

February 1, 2015 8:05 pm

A day after appeared on a collision course with its creditors,
new radical left Prime Minister Alexis Tsipras has tamped down the
rhetoric by vowing to pay off debts and not act unilaterally.
Finance
Minister Yanis Varoufakis, who had a tense meeting with Eurogroup
leader Jeroen Dijsselbloem in Athens on Saturday, has brought forward a
trip to Paris, London and Rome to meet his counterparts.
Tsipras
says he never intended to act unilaterally and expressed his certainty
that Greece and the creditors will reach an agreement.

Eurogroup President Jeroen Dijsselbloem, left, had a tense meeting over
the weekend with Greece’s Finance Minister, Yanis Varoufakis. Photo / AP

He also
pledged to pay back Greece’s debt to the European Central Bank and the
International Monetary Fund, which, along with the European Commission,
form the “troika” of Greece’s creditors.
German Finance Minister
Wolfgang Schaeuble, however, had warned Athens against strong-arm
negotiating tactics in its effort to win debt relief. Rules need to be
kept, and trust and reliability were the basis for further solidarity,
the dpa agency reported him saying.

“There’s no arguing with us about this, and what’s more we are difficult to blackmail,” Schaeuble was quoted saying in Berlin.
“We
are prepared to offer all cooperation and solidarity,” he said, but
only if Greece abides by its agreements, under which it received 240
billion ($373.5 billion) in rescue loans. Without the loans from its
fellow eurozone countries and the International Monetary Fund, Greece
would struggle to service its debts and avoid bankruptcy.
“The
discussion about a debt cut or a debt conference is divorced from
reality,” Martin Jaeger, a German finance ministry spokesman, said in
Berlin earlier.
Greece’s Parliamentary Budget Office, which makes
quarterly recommendations to lawmakers, warned that the country faces
default unless a deal with creditors is reached soon. Greece’s next
government debt obligations are due in March.
Shares on the
Athens Stock Exchange closed down 1.6 per cent on Saturday, capping
total losses of 13 per cent for the week, while the interest rate on
three-year bonds – a gauge of short-term risk of default – rocketed to
19.3 per cent.
In Athens, Dijsselbloem, the Dutchman who chairs
eurozone finance ministers’ meetings, met with top officials to sound
out the new Government.
Dijsselbloem acknowledged Greeks have
gone through much in recent years to reform their , and warned
that rash actions by the Government would not help.
“Taking
unilateral steps or ignoring previous agreements is not the way
forward,” he told reporters after his meeting with Varoufakis.
Tsipras’
government, voted in last Monday, has already said it will cancel
several planned privatisation projects and considerably scale down
planned budget surpluses requiredto pay down Greece’s significant debt.
Tsipras will launch a small tour of other eurozone countries next week, flying to Cyprus, Italy and France.
Greece’s
bailout, which began in May 2010, runs out on February 28 after an
initial two-month extension was granted for completion of frozen
negotiations.
Greece still has to receive the last 7.2 billion batch of its loans from the eurozone.
Dijsselbloem
said the eurozone countries would decide before February 28 what to do
about financing Greece. He also rejected Greece’s request to hold a
conference to discuss restructuring its debt, saying the eurozone’s
monthly finance meetings would serve the purpose.
Credit ratings
agency Fitch said at the weekend that, in the short term, both sides
have a “strong incentive” to reach an agreement to make sure Greece gets
the rescue money from the bailout programmes. It warned, however, that
drawn-out negotiations pose a “high risk” to the country’s fragile
economy.
Merkel rules out relief
German
Chancellor Angela Merkel has rejected the prospect of debt relief for
Athens, adding to tensions between the radical new Greek Government and
its international creditors.
“There has already been voluntary
debt forgiveness by private creditors, banks have already slashed
billions from Greece’s debt,” Merkel said in an interview with the
Hamburger Abendblatt newspaper.
“I do not envisage fresh debt cancellation,” she said.
The
new Greek Government has already begun to roll back years of austerity
measures demanded by the and the International Monetary
Fund in return for a bailout granted to avoid a financial meltdown in
2010, and says it will negotiate to halve the 240 billion ($373 billion)
debt.

Tags:
shared on wplocker.com