Business World

Sunday 25 March 2018

Greece crisis: Brussels showdown looms, Greeks threaten Russia link

Greek prime minister Alexis Tsipras in defiant mood over his government's intended bail-out rewrite (AP)
Greek prime minister Alexis Tsipras in defiant mood over his government's intended bail-out rewrite (AP)

There is still time for Greece to end a debt standoff with its European partners, though no Plan B is in the offing, Austria's finance minister said, adding that Athens must honor the terms of its bailout package.

A showdown in Brussels looms as Greece's new leftist government tries to cancel a deeply unpopular bailout programme with international creditors.

In addition, Greece's new government has threatened to look for money from Russia and China in a bid to avert a financial crisis rather than yield to demands from Europe.

The threat comes as a delicate moment as French and German leaders try to negotiate a peace deal with Vladimir Putin and the US considers military aid for Ukraine.

"We want a deal. But if there is no deal, and if we see that Germany remains rigid and wants to blow Europe apart, then we will have to go to Plan B,” said Panos Kammenos, the defence minister and head of the Independent Greeks party in the ruling coalition.

“We have other ways of finding money. It could be the United States at best, it could be Russia, it could be China or other countries,” he told Greek television. Mr Kammenos said Greece would prefer to leave the euro if membership means submitting to what he calls a “Europe under German domination.”

However,  Austria's finance minister Hans Joerg Schelling said:

"I think we can reach a timely solution before the end of February if Greece wants this. If not, matters would enter a "critical phase'.

"We again have a situation now in which money is being withdrawn from Greek banks. We have a situation that certain debts may not be able to be serviced, and that is of course a critical phase because the reaction on financial markets would be enormous," he said.

He ruled out prospects of Greece's leaving the European Union or euro zone, saying it was in the interest of both sides to avoid such scenarios.

"(But) ... if it does not come to a solution then a Plan B would probably have to be drawn up in time but I am unaware of one at the moment," he said.


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