Greek prime minister Alexis Tsipras has moved to calm concerns over his anti-austerity strategy, vowing not to act "unilaterally" on his country's €315 billion debt while his finance minister called for a new global deal by May.
As Mr Yanis Varoufakis brought his proposal to finance counterparts in Paris, London and Rome – steering clear of Berlin – the French became the latest to draw a line publicly through the main Greek demand: further reduction of the Greek debt burden.
On Friday the new Greek finance minister unsettled financial markets by calling into question further cooperation with the troika of EU, IMF and ECB a month before the Greek programme’s expires, leaving Athens without financial backstop.
Mr Tsipras worked the phones over the weekend to calm nerves. The left-wing premier called European Central Bank president Mario Draghi on Saturday and set up meetings this week with French and Italian leaders François Hollande and Matteo Renzi.
Then he put out a clarifying statement calling for leeway in tackling what he sees as the root of Greece’s economic problems: tax evasion and corruption among the country’s ruling oligarchs.
“It has never been our intention to act unilaterally on Greek debt,” said Mr Tsipras in a statement.“We need time to breathe and create our own medium-term recovery programme.”
Austerity measures
Days after sweeping into power the new Syriza-lead administration put on hold some and rolled back other austerity measures. On Friday
Mr Varoufakis
refused an extension to the €172 billion bailout, saying it was throwing good money after bad. In Paris last night, he said
Greece
wanted to go “cold turkey” rather than continuing borrowing.
Greece’s next tranche from the EU/IMF troika of €7.2 billion depends on the successful completion of the latest review by the end of February.
French finance minister Michel Sapin indicated he would "welcome anything that can alleviate the debt burden" for Greece but that there was limited enthusiasm for further concessions for Athens.
“There is no question of cancelling the Greek debt,” said Mr Sapin, describing this a transfer of a financial burden from Greek to other European taxpayers.
Before Mr Tsipras meets European Commission President Jean-Claude Juncker this week, commissioner for economic affairs Pierre Moscovici insisted that Greece's future inside the currency bloc was "very important for the . . . credibility of the euro"
“This is why we will do everything that is needed to avoid it,” he told the BBC.
In almost identical language, Dr Merkel told German weekend newspapers she was anxious for Greece to remain in the euro are but did not “envisage” any fresh debt cut.
Debt forgiveness
“There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debt,” she said.
Despite write-downs in 2012, Greece still has accumulated debts exceeding €315 billion – or 175 per cent of gross domestic product.
As a month of tense brinkmanship looms, Syriza's win put wind in the sails of other anti-austerity parties. In Madrid on Saturday, some 100,000 people marched with the anti-austerity party Podemos ahead of elections later this year.
In Germany, meanwhile, a new poll suggested that 68 per cent of Germans opposed to any further debt write-downs for Greece – though 62 per cent told Bild am Sonntag they favoured Greece staying in the 19-country currency union.
Just 26 per cent of Germans wanted Greece out of the euro – the core demand of the euroskeptic Alternative für Deutschland. At a weekend conference, AfD founder Bernd Lucke saw off a challenge by party rivals he accuses of trying to topple him and push the party to the extreme right.
“Greece must leave the euro, I hope they will,” said Prof Lucke, though he conceded “this no longer seems to be the plan”.
