Wednesday 13 December 2017

Greece rules out Russian aid as Tsipras tours Europe

Greece's new Prime Minister Alexis Tsipras (L) meeting with the President of Cyprus Green Party, Giorgos Perdikis on February 2, 2015 in the capital Nicosia.
Greece's new Prime Minister Alexis Tsipras (L) meeting with the President of Cyprus Green Party, Giorgos Perdikis on February 2, 2015 in the capital Nicosia.

Michele Kambas and William James

Greek Prime Minister Alexis Tsipras ruled out seeking aid from Russia and said he would pursue negotiations for a new debt agreement with European partners, but saw little sign of compromise from Germany.

Mr Tsipras and his finance minister Yanis Varoufakis are touring European capitals this week in a diplomatic offensive to replace Greece's bailout accord with the European Union, European Central Bank and International Monetary Fund "troika".

After a tumultuous first week during which his left-leaning government made clear it intends to keep campaign promises to ditch the tough austerity conditions imposed under its existing bailout, the emphasis this week appears to be on maintaining that a deal is still possible.

"We are in substantial negotiations with our partners in Europe and those that have lent to us. We have obligations towards them," Mr Tsipras said at a news conference in Cyprus during his first foreign visit as prime minister.

"Right now, there are no other thoughts on the table," he said, when asked whether Greece would seek aid from Russia, which has suggested it could be willing to listen to a request for support from Athens.

The remarks on Russia could reassure EU partners shocked last week when the Tsipras government initially appeared to reject the bloc's consensus on economic sanctions against Moscow. Greece eventually signed up last Thursday to extending existing sanctions against Russia for six more months.

Greece, unable to borrow on the markets and facing pressure to extend the current support agreement when it expires at the end of this month, is looking for a bridging agreement that would give it breathing space to propose a new debt arrangement.

It has so far met a tough line from European partners, above all from Germany. German Finance Minister Wolfgang Schaeuble said in an interview yesterday that Berlin would not accept any unilateral changes to Greece's debt programme.

"We want Greece to continue going down this successful path in the interests of Greece and the Greeks but we will not accept one-sided changes to the programme," he said at the Euro Zone Summit.

Mr Tsipras repeated calls already made by his finance minister Varoufakis for the mechanism of inspectors from the "troika" overseeing Greek finances to be dismantled and replaced by direct negotiations between Athens and its EU and IMF partners.

"I believe that this would be a mature and necessary development for Europe," he said.

Germany responded that the troika controls were agreed as part of the bailout and should remain in place.

"The German government sees no reason to scrap this mechanism of evaluation by the troika," Finance Ministry spokeswoman Christiane Wirtz said in Berlin.

To some degree, both sides are posturing ahead of what is certain to be difficult negotiations. The Greeks appear to be searching for more sympathetic ears first, before meeting the Germans.

Mr Varoufakis, a pugnacious economist who has likened EU austerity policies to "waterboarding", has been arriving for meetings in a black coat and untucked, open-collared shirt. He began in Paris over the weekend, where the centre-left government is thought to be more sympathetic than others to the case for relaxing lending conditions.

French Finance Minister Michel Sapin said after meeting Mr Varoufakis that Athens could not expect a straight debt write-off, but left the door open to other options that include giving Athens more time for repayment.

Mr Varoufakis's next stop was in London where he was met about 100 banks and financial institutions. A Greek government source said he planned to tell the private sector investors that they had nothing to worry about.

Mr Varoufakis also met British officials, seeking more European allies, although Britain is not a member of the euro zone.

Today, Tsipras will meet Italy's Prime Minister Matteo Renzi, another young centre-left leader who is thought to be among those most sympathetic to calls for leniency.

He sees European Commission President Jean-Claude Juncker and French President Francois Hollande on Wednesday. So far no date has been set for a meeting with German Chancellor Angela Merkel, although they will meet at a European summit next week.

Irish Independent

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