Greece’s Yanis Varoufakis begins European talks in France

New finance minister to visit France on Sunday before heading to London and Rome, as prime minister Alexis Tsipras says Greece does not intend to renege on bailout terms

Sunday 1 February 2015 published at The Guardian

Greece’s new anti-austerity government was set to kick off its European charm offensive in Paris on Sunday seeking to renegotiate its €240bn (£179bn) bailout despite resistance from Germany to consider any debt relief.

Finance minister Yanis Varoufakis, who is aiming to write down half of Greece’s debt, was scheduled to meet with the French finance minister, Michel Sapin, and the economy minister, Emmanuel Macron, in the afternoon, before heading on to London and Rome.

Greece’s prime minister, Alexis Tsipras, has tried to calm nerves and markets spooked by his radical plans, saying he did not intend to renege on commitments to the EU and International Monetary Fund.

“It has never been our intention to act unilaterally on Greek debt,” Tsipras said in a statement to Bloomberg News.

But he said Greece needed greater leeway to tackle root problems in its economy, such as tax evasion, corruption and policies that favour only a wealthy few.

“We need time to breathe and create our own medium-term recovery programme,” he said.

Varoufakis is likely to get a warm hearing in France, where Sapin has already said the EU should be open to restructuring Greek debt or extending the bailout terms.

Amid the flurry of diplomacy, Tsipras spoke with the European Central Bank chief Mario Draghi on Saturday night and has booked in meetings with the Italian prime minister Matteo Renzi, the French president François Hollande and the European commission president Jean-Claude Juncker this week.

Neither he nor Varoufakis are intending to visit Germany, which has shouldered the bulk of Greece’s loans and which strongly objects to Athens’ plans.

The German chancellor, Angela Merkel, on Saturday ruled out fresh debt relief, telling the Hamburger Abendblatt daily: “There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debt.”

“I do not envisage fresh debt cancellation,” she said, as a new poll for broadcaster ZDF found 76% of Germans oppose any debt reduction.

The Portuguese prime minister, Pedro Passos Coelho, and the Finnish prime minister, Alexander Stubb, also oppose any debt relief.

Despite a restructuring in 2012, Greece is still lumbered with a debt pile of more than €315bn, upwards of 175% of gross domestic product – an EU record.

But in its first week in power, the government scrapped the privatisation of Greece’s two main ports and the state power company and announced a big increase in the minimum wage.

Varoufakis has further raised the stakes by refusing to continue talks with the EU-IMF negotiating team known as the “troika”, saying they want to deal only with individual governments.

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