ATHENS – Even as he said he won’t talk to international lenders, Greek Prime Minister Alexis Tsipras wants the European Central Bank to shore up faltering Greek banks who’ve seen an out flow of 12 billion euros.
The ECB, along with the European Union and International Monetary Fund, makes up the Troika of the EU-IMF-ECB that has put up 240 billion euros ($272 billion) in two bailouts to help prop up the ailing economy since 2012.
But those rescue packages came with harsh austerity measures that Tsipras, the leader of the Radical Left SYRIZA party, is trying to reverse and as he wants debt relief, iring EU leaders who fear he could jeopardize the Eurozone.
The confrontation has sent Greeks flying to banks to yank out money and Tsipras has asked the ECB to keep supplying liquidity.
Finance Minister Yanis Varoufakis said Greece won’t take any more loans and wants to restructure the deal but conceded it needs the ECB’s help.
“During this period, it is perfectly possible in conjunction with the ECB to establish the liquidity provisions that are necessary,” he said while in Paris to talk to his counterpart, Michel Sapin.
Tsipras said Greece would repay what it owes – as much as it can – and wants to stay in the Eurozone as he tried to calm market fears.
Interest rates on bonds shot up and bank stocks fell fast as soon as Tsipras took power and as German Chancellor Angela Merkel, whose country has put up much of the loan monies but who demanded austerity, rejected Greek debt relief.
He’s not scheduled to see Merkel, the biggest contributor to Greece’s financial rescue, until an EU summit on Feb. 12 but a German official told the Bloomberg news agency she will avoid seeing him face-to-face for what could otherwise be a tense scene as he has described her as being largely responsible for misery caused by austerity.
Merkel reportedly wants to isolate Tsipras in the EU and undercut his drive for debt relief that would force taxpayers in the other 17 Eurozone countries, including Germany, picking up the tab for decades of wild overspending by previous Greek governments of the New Democracy Conservatives and the PASOK Socialists.
Merkel also is said to doubt Tsipras’ belief he can keep the economy going by taxing the rich, chasing tax cheats – which previous Premier Antonis Samaras largely failed to do – and cracking down on corruption.
“Europe will continue to show solidarity with Greece, as well as other countries particularly affected by the crisis, if these countries undertake their own reforms and savings efforts,” Merkel said in an interview with Hamburger Abendblatt.
Greece for now has a special dispensation from the ECB because it’s considered to be complying with the bailout program. That means its debt can be used in central bank refinancing operations even though it is rated junk.