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Just ahead of a critical March 9 meeting in Brussels with the Eurozone where Greece will present a second vague outline of reforms needed to get release of loan monies, Finance Minister Yanis Varoufakis said if the country is squeezed too hard it could lead to a referendum or early elections again.

The Radical Left SYRIZA-led coalition government of Prime Minister Alexis Tsipras and his partner, the formerly anti-austerity Independent Greeks (ANEL) who now also are going along with tough conditions, was elected just on Jan. 25 on a promise to reverse austerity and to negotiate debt relief but has retreated.

Greece on Feb. 20 accepted a four-month extension of the 240 billion euros ($272.5 billion) in two rescue packages from the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) Tsipras said he wouldn’t do, along with not speaking to the envoys, which he has.

But after being forced to relent on virtually all his campaign promises, Tsipras is getting a little tougher, as Varoufakis indicated, saying it’s now the lenders’ turn to bend a bit. Greece has until the end of April to make more specific reforms to get more money, a delayed 7.2-billion euro installment the government said earlier it wouldn’t take but now needs with cash running out and the banks teetering.

If the Eurozone and the troika nix Greece’s proposals, Varoufakis told Italian daily Corriere della Sera: “There could be problems. But, as my prime minister has said, we are not yet glued to our chairs. We can return to elections, call a referendum.”

In a statement released later, the Greek Finance Ministry said that Varoufakis was responding to a hypothetical question and that any referendum would “obviously regard the content of reforms and fiscal policy” and not whether to stay in the euro, as Corriere della Sera had suggested.

Most Greeks want the country to keep the euro, but two-thirds also continue to back the government’s weak stance to renegotiate the bailout package, which Tsipras said he would but now says he won’t although he said he still wants to but can’t.

A referendum over a deal with lenders that keeps the country in the eurozone but falls short of Tsipras’ promises could give him an out to say he tried but failed and to walk away from his campaign promises but could set off more internal dissent in SYRIZA, a loose collection of Maoists, Trotskyites, Leninists, Stanlinists, Anarchists and other extremists.

In 2011, then-prime minister George Papandreou suggested calling a referendum over the bailout and was later forced to make way for a unity coalition led by a former central banker which led to the election of another coalition led by New Democracy Conservative leader Antonis Samaras, who was trounced in the January ballot.

With the Tsipras government’s popularity level as high as 76 percent despite reneging on promises,  Varoufakis said “people understand” that the government is fighting the “establishment that said it was saving Greece while it put everything on the backs of the poor”.

Samaras, who is now head of the main opposition party, said a referendum would be “a very bad development” and allow the government to shrug off its responsibilities as it accepts essentially the same terms he was forced to take – and for which SYRIZA hammered him so much it led to early elections that brought the Leftists to power, only to recant their pledges.

Samaras’ former coalition partner, the once-dominant PASOK Socialists who have fallen to last place in Parliament and now are now irrelevant, said Varoufakis’ statement and ideas were “irresponsible, thoughtless and contradictory”.

The new finance chief though revels in speaking what he calls “constructive ambiguity,” or making simultaneously opposing statements.

In the interview, Varoufakis said that the response so far by Eurozone partners to his proposals to replace its current debt with bonds linked to nominal growth is “silence.”

“I’d like for Europe to understand that this would be a way of paying back more money, not less,” Varoufakis said of the growth-linked bonds which the troika has already tossed out the window without discussion.

In 2011, Greece led the entire Eurozone into crisis until it accepted the first of two bailouts nd now there is worry that the political instability could jeopardize the bloc again even though stronger safeguards are now in place.

Varoufakis said that the state had the money “to pay pensions and public administration salaries” and he said Greece does not need a new, third loan to pay its bills although Tsipras said it might but that it wouldn’t be called a bailout but a “safety net,” so he can avoid using the term bailout.

Varoufakis also criticized the European Central Bank for being “disciplinary” in not letting Greece issue more short-term debt, and said it should buy Greek debt as part of its bond-buying program right away and not this summer, as it has said it would.

 

 

Source: The National Herald
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