Greek impasse risk to world economy – UK Treasurer

February 3, 2015 6:34 am

British Finance Minister , right, walks out to bid
farewell to ’s new finance minister after their
meeting at 11 Downing Street in London. Photo / AP

Britain’s Finance Minister has warned that the standoff between
Greece and the eurozone over the country’s bailout is endangering the
global , urging the new government in Athens to act responsibly.
Osborne characterised his talks with Greece’s new Finance Minister
Yanis Varoufakis on Monday as “constructive,” but cautioned that now was
the time to “choose competence over chaos.” He urged the eurozone
countries to come up with a better plan for jobs and growth in Greece.
clear that the standoff between Greece and the eurozone is fast
becoming the biggest risk to the global economy, and it’s a rising
threat to our economy at home,” Osborne said.

Greece’s radical left Syriza party won parliamentary
elections last week, alarming investors and eurozone governments. Party
leader and new Prime Minister Alexis Tsipras has said he wants to end
years of budget austerity that eurozone countries and the International
Monetary Fund had required in exchange for 240 billion-euro
($NZ372billion) in rescue loans. He also wants to renegotiate payment of
the bailout debt.
Greece’s finance minister will meet with
investors and fund managers in London today as he continues his tour of
European capitals to drum up support for his government’s demands.
Britain is not part of the euro, Varoufakis sought to build rapport
with Osborne with face-to-face talks. Downing Street described Britain’s
position is one of continuity – and that Greece should honour the terms
of its bailout.
Tsipras struck a more conciliatory tone,
meanwhile. He dismissed what he called scaremongering over his
government’s position on bailout negotiations and said that while the
Greek people expect him to carry out tough negotiations with eurozone
creditors, that would happen “within a European framework.”
said he was surprised many “powerful European forces” back his
government’s call to focus policies on economic growth and not just debt
needs to take a breath, certainly through
mutual understanding and common steps,” said Tsipras. “But there’s no
need to further constrict those breaths that people and economies need
in order to move toward growth.”
Speaking in Cyprus, Tsipras
ruled out suggestions that his government may reach out to Russia for a
loan, saying his government’s primary objective is to conclude a deal
with Greece’s European partners and “all those who have loaned to our
country and to whom our country has obligations.”

analyst said the pressure will fall on the Greek government
in the coming weeks, as it will run out of money. He said the Greek
government’s tactic is to build support around the region outside
Germany – long the biggest defender of austerity policies – before the
hard task of negotiation really begins.
“We would highlight that
nothing will be settled until everyone is at the negotiating table,
including the Germans,” he said in a statement. “If anything, our sense
of the German position is that it has been hardening rather than

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