Greek finance minister Yanis Varoufakis to visit London

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Yanis Varoufakis to meet George Osborne and City bankers on whistlestop tour of Europe to drum up support for Athens’ Syriza government

published at The Guardian

Greece’s new finance minister Yanis Varoufakis. Photograph: Petros Giannakouris/AP
Phillip Inman, Helena Smith in Athens, and Ian Traynor Brussels
Thursday 29 January 2015 19.44 GMT

Greece’s new young radicals sweep away age of austerity

The new Greek finance minister is to call on George Osborne and City bankers next week as part of a whistlestop tour of European capitals to drum up support for Athens’ new leftwing government.

Yanis Varoufakis will visit No11 before heading to Paris and Rome with the aim of building closer co-operation between Greece and the major EU economies.

A spokesman for the minister said he will also meet representatives of the financial sector in the City of London.

The announcement came as new Greek prime minister Alexis Tsipras played host to president of the European parliament Martin Shulz and the foreign minister Nikos Kotzias raced to Brussels to join his German counterpart Frank-Walter Steinmeier.

Coming only two days after the new cabinet was assembled, the flurry of meetings cemented the claim of the governing Syriza party that it intends to move quickly to renegotiate the huge mountain of public sector debt it has inherited.

But Athens immediately threatened EU solidarity when Kotzias delayed agreement on further EU sanctions against Russian-backed separatists in Ukraine. The move raised European and Nato fears that Moscow might seek to exploit the hard left and far right coalition under Alexis Tsipras as a Trojan Horse within the key western alliances.

The emergency meeting of EU foreign ministers was convened in Brussels to respond to the upsurge in violence in eastern Ukraine, notably last week’s shelling of the town of Mariupol by pro-Russian secessionists which left 30 civilians dead and 100 wounded.

On Thursday evening the ministers agreed to prolong the blacklisting of pro-Russian separatist leaders from March until September and to add new names to the blacklist by next week, and asked the European commission to look into broadening the economic and financial sanctions against Russia imposed last July.

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At an earlier meeting of 28 EU ambassadors, the Greek ambassador refused to agree to the key passage on sanctions – prolonging the blacklisting of 132 individuals and 28 “entities”, mainly in eastern Ukraine and Crimea. The Greek representative, diplomats said, told the meeting he could not take a position until his minister arrived in Brussels, forcing the group to issue a holding statement.

Although several other countries are lukewarm about renewing or extending sanctions against Moscow or the Russian separatists, diplomats said there were no other dissenters on the statement which squarely held Russia to blame for facilitating the Mariupol attack.

Nikos Kotzias, the new Greek foreign minister, said Greece wanted to “prevent a rift” between Russia and the EU although both sides have been in acute conflict for the past 10 months over Moscow’s assault on Ukraine.

Russian finance ministerm Anton Siluanovm said on Thursday that Russia would consider extending financial aid to Greece if Athens were to make a request.

“Well, we can imagine any situation, so if such petition is submitted to the Russian government, we will definitely consider it, but will take into account all the factors of our bilateral relationships between Russia and Greece,” he told CNBC.

The Athens government is under pressure to make a series of monthly debt interest payments or find itself in default. Tsipras is keen to impress on European leaders that the government can only run a balanced budget if its €240bn rescue loan is reduced.

In response to the growing uncertainty, one of the three biggest credit ratings agencies threatened to downgrade Greek debt to junk if talks with its international creditors failed to make progress.

Fitch said it would need to see the results of any negotiation by the time of its next review in May to avoid a downgrade, one of the firm’s senior ratings directors said.

Fitch is the last of the big three ratings agencies, after Standard and Poor’s and Moody’s, to send a warning to Greece’s new anti-bailout coalition.

“If by our next review on the 15 May there is no progress on these talks or they look to be failing, of course that would be a trigger for a downgrade,” Douglas Renwick, the firm’s head of western European sovereigns, said during a conference call.

“Alternatively, if a deal is reached with more financing and more support, then that may be a cue to affirm the rating.”

The agency is also closely watching Greece’s banks, which are experiencing deposit withdrawals and have seen their borrowing costs soar amid the political uncertainty.

Greece’s top four listed banks, Alphabank, Piraeus Bank, National Bank of Greece and Eurobank Ergasias, are all rated B-minus by Fitch, one notch below the sovereign debt.

Varoufakis, who speaks fluent English after studying at Essex University and teaching in the UK, Australia and the US, is also aiming to meet French finance minister Michel Sapin, and economy minister Emmanuel Macron, in Paris on Monday afternoon.

On Tuesday, he will conduct talks in Rome with his counterpart Pier Carlo Padoan “for an exchange of views on the macro-economic course of the eurozone,” the finance ministry said.

Ahead of his tour, Varoufakis will be hosting Dutch finance minister Jeroen Dijsselbloem, who also heads the eurogroup of finance ministers.

“The start of negotiations with our partners which will lead us to a viable and comprehensive solution for the reconstruction of our social economy in the framework of a developing Europe,” the Greek finance ministry added.

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