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ATHENS – With Germany – the biggest lender to international loans propping up the Greek economy – refusing to talk about debt relief plans, Greece’s new Radical Left-driven government is trying to prepare a plan to convince European Union leaders to go along.

Greek Finance Minister Yanis Varoufakis went to Berlin to meet his counterpart, hardliner Wolfgang Schaeuble, who’s keeping to German demands for continued austerity and reforms in return for the loan monies, but returned to Athens empty-handed.

Greek Prime Minister and SYRIZA leader Alexis Tsipras is backing off campaign promises to revise the austerity terms that came with two bailouts of 240 billion euros ($272 billion) from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).

Varoufakis instead has offered a debt-for-bond swap pegged to growth in the Greek economy – which could be years off – or to pay interest only for infinity but Germany isn’t buying what he’s selling for now with German Chancellor Angela Merkel sticking to her guns despite fears if Greece defaults that it could jeopardize the Eurozone.

Varoufakis said he will give Eurozone finance chiefs from the other 18 countries in the bloc a plan that would show how Greece could transition from its current bailout to a new agreement, which he believes can be agreed by the end of May.

Tsipras had said he wouldn’t sign any new deals but with pressure building, he’s backsliding on his campaign vows, including to increase social spending to help the country’s most vulnerable who were hammered with big pay cuts, tax hikes, slashed pensions and worker firings by the former coalition led by New Democracy Conservative leader Antonis Samaras and his partner, the PASOK Socialists.

Varoufakis made the pledge at a meeting with Schaeuble where the two were far apart on how to deal with Greece’s debt and repayment. Schaeuble said Greece has to stick to the memoranda it signed with the Troika and work with the group although Tsipras refuses to recognize its authority over Greece.

Varoufakis said Greece doesn’t want the next Troika installment of 7.2 billion euros but the country is fast running out of money to operate and has big bond payments due later in the summer.

Playing for time, he said Greece needs breathing space to negotiate with the Eurozone to reach a new “contract,” which he wouldn’t call a “memorandum,” a term Tsipras used to ridicule previous governments for signing.

“We didn’t discuss Greece’s debt schedule for repayments, we didn’t discuss a haircut,” said Varoufakis, who insisted that the country would avoid a default without explaining how. “We set the scene for deliberations that will lead to an approach which will put an end to this seemingly never-ending crisis.”

Varoufakis also made reference to the rise of the ultra far-right Golden Dawn in Greece during the economic crisis and called on Germany to help combat this threat.

“When I return home tonight I shall find myself in a Parliament in which the third-largest party is not a neo-Nazi party, it is a Nazi party,” he said. “We need the people of Germany on our side. We need the people of Germany to help us in the struggle against misanthropy.”

Schaeuble said Greece has no choice but to follow orders from Germany and the Troika and that Tsipras has to renege on his campaign promises and must pay what it owes.

“I told my colleague that we respect the Greek electorate’s will but that in every European Union member state the electoral will of voters in all other countries also has to be respected,” Schaeuble said. “The reasons for the difficult path that Greece must follow lie in Greece, not in Europe.”

“I couldn’t hide my skepticism in the conversation that some measures announced by the new government don’t necessarily go in the right direction in our opinion,” he said.

Sources told Kathimerini that Berlin is adamant that the IMF wants to stay in Greece as a monitor with the agency’s spokesman Gerry Rice saying a meeting between Varoufakis and the fund’s Athens envoy Poul Thomsen being a formality.

Talking to his party and its coalition partner the far-right Independent Greeks, Tsipras sought to outline the strategy his government will follow in negotiations with the country’s creditors.

“Greek democracy doesn’t want to blackmail or threaten anyone,” he said. “It also won’t be threatened by anyone, because democracy in Europe cannot be blackmailed,” he added.

He reiterated his intention to “negotiate hard” and to “put a definitive end to the Troika and its policies,” despite some backtracking so far.

He stressed that his government would honor its pre-election commitments, noting that it was a duty to “not allow citizens to be cheated again.”

“We are a sovereign state, we have a democracy, we have an agreement with our people and we will honor it,” he said.

Tsipras said his government had presented its proposals and was awaiting a response although Varoufakis is preparing a new blueprint.

Tsipras said that th new Greek government respected EU requiring balanced budgets, noting however that “austerity is not an EU founding principle.”

The government guaranteed the country’s “course in Europe” and deposits in banks which are “absolutely safe,” he added.

The post After Berlin Setback, Greece, SYRIZA Reset Big Debt Relief Plans appeared first on The National Herald.

Source: The National Herald
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