New Greek government steps up battle with creditors

GMT 21:20 2015 Friday ,30 January

Arab Today, arab today New Greek government steps up battle with creditors

Greek Finance Minister Yanis Varoufakis
Athens - AFP

Greece's new government dramatically escalated its battle with the country's international creditors Friday, refusing to meet EU and IMF officials and rejecting fresh loans offered for February.
Athens had been promised another 7.2 billion euros in funds from the European Union, the IMF and and the European Central Bank if it completed reforms required by its lenders by February 28.
But hardline Finance Minister Yanis Varoufakis said that despite warnings Greece would shortly run out of money, his government preferred to do without the instant fresh cash, and instead renegotiate the entire bailout package.
"This government was elected on the basis of analytically questioning the very logic of the programme now being applied," he said, referring to the reforms and budget cuts demanded by Athens' international creditors.
"Our first act as government will not be to reject the logic of questioning this programme by requesting to extend it," he added.
The leftist minister spoke after talks with Eurogroup chief Jeroen Dijsselbloem, the first between the anti-austerity government and the creditors behind Greece's huge bailout.
At a strained press conference with Dijsselbloem, Varoufakis also said Athens was willing to negotiate with its lenders but not with the so-called "troika" of EU, IMF and ECB auditors who he said were merely a "committee built on rotten foundations".
Dijsselbloem warned: "Taking unilateral steps or ignoring previous arrangements is not the way forward."
He said before arriving in the Greek capital that the new government, led by Prime Minister Alexis Tsipras's hard-left Syriza party, has been raising expectations it cannot meet.
Tsipras was elected on Sunday on a platform of ending austerity and cutting Greece's debt in half.
"If you add up all the promises (made in the election campaign), then the Greek budget will very quickly run totally off course," Dijsselbloem said ahead of his talks.
Tsipras will next week travel to fellow eurozone members Italy and France as he starts the process of trying to renegotiate the deeply unpopular bailout, which was granted to avoid a financial meltdown in 2010.
Varoufakis will also begin a tour of European capitals next week, meeting his British, French and Italian counterparts.
- 'Debt reduction not on radar' -
Before Friday's talks, debt rating agency Fitch said Greece was still likely to reach a deal with its creditors but only after protracted talks damaging to the economy.
"There is a high risk that protracted and difficult negotiations will sap confidence and liquidity from the Greek economy," it said in a note.
Greek stocks lost another 1.59 percent on Friday, a day after plunging on concerns about the first moves of Tsipras's radical new administration to roll back several reforms underpinning the bailout.
European Parliament chief Martin Schulz, the first visiting foreign dignitary to meet Tsipras' government, on Thursday said the prime minister had assured him that Greece would seek "common ground" with its EU peers.
But in a later interview, Schulz said Tsipras' coalition alliance with the Independent Greeks, a hardline nationalist party, was "not something good for the country."
"This government will enter into confrontation with the European Union at a time when dialogue is needed," he told SKAI TV.
European Commission chief Jean-Claude Juncker said a reduction of Greece's 315-billion-euro debt linked to the bailout "is not on the radar".
"I don't think there's a majority in the Eurogroup... for a reduction of the debt," he told Germany's ARD television, referring to the eurozone's finance ministers.
Sigmar Gabriel, Germany's vice-chancellor and also its economy minister, said he expected Greece to "stick to its commitments" for fiscal and economic reform made in exchange for the bailout.
He was critical of a decision by the new government to scrap the privatisation of the two main ports of Piraeus and Thessaloniki, and the biggest Greek power company, decisions which have also drawn a rebuke from China that has a major investment in Piraeus.
The Greek central bank said 4.0 billion euros in private deposits had been withdrawn from banks in December.
But Daniele Nouy, head of the European Central Bank's Supervisory Board, said despite the post-election turbulence,


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