As Greece’s Radical Left SYRIZA took power, the European Union warned Prime Minister Alexis Tsipras to stick to austerity or risk being pushed out of the Eurozone.
Tsipras won a stunning victory in the Jan. 25 elections over the then-ruling New Democracy Conservatives of previous Premier Antonis Samaras by promising to renegotiate the tough terms that came with two bailouts of 240 billion euros ($306 billion) from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) or walk away from half the debt.
That stance could jeopardize Greece’s standing in the Eurozone of the 19 countries using the euro and risk losing private investors at the same time Tsipras said he would return state spending to previous levels and undo the measures implemented by Samaras on Troika orders.
While EU officials said they were ready to talk about prospective new terms such as lower interest or a longer time to repay they have categorically ruled out Greece getting a debt cut as that would pass the costs on to taxpayers in the other 18 Eurozone countries, politically unacceptable to their leaders.
Eurozone finance ministers met in Brussels a day after SYRIZA stormed to victory in elections on the back of Tsipras’ promises to end “disastrous austerity” and seek a cancellation of Greek debt.
“Membership of the Eurozone means that you comply with everything you have agreed with,” said Eurogroup head Jeroen Dijsselbloem, adding that “on that basis, were ready to work with them,” Agence France Presse reported.
He didn’t rule out other steps to help Greece as long as Tsipras sticks to austerity, which the new Premier vowed he wouldn’t do and as he said he wouldn’t talk to the Troika as a first order of business but was willing to negotiate with them at some point.
“Writing off debt in nominal value, I don’t think theres a lot of support for that within the Eurozone,” Dijsselbloem said. Tsipras said it’s the only way Greece can recover because it can’t pay.