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ATHENS — Greece reshuffled its bailout negotiating team on April 27 following fierce criticism of its Finance Minister, meeting with market applause as investors hoped it will facilitate a deal to save the country from bankruptcy.

A Greek official insisted Yanis Varoufakis, who has come under fire from his European peers for dragging his feet in the bailout talks, continued to enjoy the government’s support. He will continue to lead the negotiations, which have been delayed for three months.

But Euclid Tsakalotos, who is Minister of International Financial Relations and part of the Foreign Ministry, will handle the coordination within Varoufakis’ negotiating team.

Tsakalotos is close to Prime Minister Alexis Tsipras and has often accompanied Varoufakis on trips to European capitals during the negotiations.

A separate team will be created to support technical talks in Athens, while the Finance Ministry’s General Secretary for Fiscal Planning was tasked with designing a plan for economic growth. The official spoke on condition of anonymity in line with government regulations

The moves suggest the Greek government is intent on reaching a deal and the main Greek stock index rallied on the news, closing up 4.4 percent.

Yields on the country’s two-year bonds — a gauge of market fears that the country might default — fell almost 2 percentage points to about 23 percent.

It is unclear how far the reshuffling will curb Varoufakis’ influence in the negotiations, and if so, whether that will change the tenor of the talks.

Varoufakis was rebuked by Greece’s creditors most recently at a finance ministers’ meeting in Riga, Latvia, where he failed to come up with a list of economic reforms creditors want in exchange for new loans.

In Athens, government officials say Varoufakis has been unnecessarily vilified and has been subject to a smear campaign by the international media.

On April 26, Varoufakis took to Twitter with a Franklin D. Roosevelt quote. “FDR, 1936: ‘They are unanimous in their hate for me; and I welcome their hatred.’ A quotation close to my heard (& reality) these days,” he tweeted.

Under a four-month bailout extension, Greece had until April 30 to come up with acceptable reforms so creditors can unlock the final 7.2 billion euro ($7.8 billion) loan installment. But a deal still seems far off.

Beyond the criticism of Varoufakis, European officials deplore the new government’s intransigence and lack of progress in proposing acceptable reforms to unlock bailout funds that Greece desperately needs to avoid default and a potential exit from the euro.

Tsipras won Jan. 25 elections on promises to repeal deeply resented austerity measures, including pension cuts and tax increases, which came as a condition for Greece’s two international bailouts worth a total of 240 billion euros from other eurozone countries and the International Monetary Fund.

“Our intention is to keep Greece in the Eurozone,” German Finance Ministry spokesman Martin Jaeger said in Berlin.

“But I would like to point out again that the ball is definitely in the Greeks’ court. We are waiting for proposals. We have been waiting for weeks. That is somewhat frustrating, but we are patient.”

Despite European criticism, Varoufakis continues to enjoy strong popularity at home. A weekend poll showed 55 percent of respondents had a positive view of his actions as minister, versus 36 percent with a negative view.

But the poll, carried out by ALCO for the Proto Thema Sunday newspaper, showed falling ratings for the government.

Fifty-two percent were unsatisfied with its performance, compared to 39 percent who were. If creditors don’t accept Greece’s proposals, 50 percent want the government to compromise and 36 percent want a rupture.

In a February poll by Metron Analysis, 68 percent of respondents had said they were satisfied with the government’s handling of the negotiations, compared to 23 percent who objected.

A separate poll, by Kapa Research for To Vima newspaper, found 71.9 percent of respondents believe the best outcome is a compromise with creditors.

Despite the fall, SYRIZA still enjoys a comfortable lead over its main rival, the conservative New Democracy party — 33.3 percent of voters favor it against 20.2 percent.

Both polls had a margin of error of about 3.1 percent.

RUNNING ON EMPTY

 

Greece is running out of cash fast and closing in on a default unless it can get more aid, including a 7.2-billion euro installment that has been held up because reforms haven’t been imposed

The appointment suggested Tsakalatos, an Oxford-educated economist and professor who is soft-spoken and well-liked by officials representing creditors, would have a more active role in face-to-face talks from now on, Reuters said.

Varoufakis, a brash and outspoken economist/bloggers, is widely disliked by other Eurozone finance chiefs and failed to get any offers of help in Latvia just when Greece most needed it.

He was later criticized by media for failing to appear at a state dinner after the meeting. He responded by tweeting a quotation by American statesman Franklin Roosevelt which read, “They are unanimous in their hate for me; and I welcome their hatred.”

New Democracy Conservative lawmaker Dora Bakoyannis wanted him fired outright. She told SKAI TV that Varoufakis was a “drag,” and that, “the best thing he can do is to resign.”

“Support for Finance Minister Yanis Varoufakis, who has been targeted by international media reports, was confirmed during the meeting,” the government official said, referring to a meeting of Tsipras with top aides without explaining what if that was so that Tsakalotos is getting a key role.

“The Finance Minister always acts in line with collective decisions and the government’s leadership,” the statement added.

Varoufakis’ role is also being undercut with the emergence of Finance Ministry General Secretary Nikos Theocharakis, who had been leading technical-level talks with the so-called Brussels Group of lenders, now drawing up the reforms list instead.

George Chouliarakis, considered close to the powerful deputy Prime Minister Yannis Dragasakis, will take over responsibility for talks with the Brussels group.

In an effort to show that Athens is serious about giving lenders access to data, a new team was also set up to support EU and IMF officials gathering information in the Greek capital.

(Material from the Associated Press was used in this report)

The post Greek Shakeup Spurs Market Hopes appeared first on The National Herald.

Source: The National Herald
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