Wednesday 21 March 2018

Greece urges Germany to help in bringing end to debt crisis 'indignity'

Greek Finance Minister Varoufakis and German Finance Minister Schaeuble in Berlin.
Greek Finance Minister Varoufakis and German Finance Minister Schaeuble in Berlin.

Antonia Molloy and Niall O'Connor

Greece's new finance minister has urged Germany to help end the "gross indignity" of the Greek debt crisis.

Yanis Varoufakis said "too much time, hopes, lives" had been wasted by Greece's forced austerity programme.

He was speaking after talks with his German counterpart, Wolfgang Schaeuble, who said a reduction of Greece's debt was off the agenda. Mr Varoufakis has been seeking support for Greece's plan to renegotiate its massive international bailout.

Last night, thousands of people gathered in front of the Greek parliament to back the radical leftist Syriza party, which won last month's general election with a pledge to write off half the country's debt.

"It's the first demonstration in favour of a Greek government," Telemaque Papatheodorou, an engineer attending the rally, told the AFP news agency.

The demonstrators were also protesting against what they described as "blackmail" by the EU.

Earlier, the Greek stock market fell sharply after the European Central Bank (ECB) said it would refuse to accept Greek bonds in return for lending. Nervous investors dumped Greek shares as the ECB tightened its grip on the country's banking system.

Shares on the Athens stock exchange dropped nearly 10pc on opening, but later recovered and were trading later about 6pc down. European markets also dropped, with the Euro Stoxx 50 index down 0.6pc.

In a surprise announcement on Wednesday, the ECB said it would stop lending to Greek banks using the nation's government bonds as collateral, thereby piling pressure on prime minster Alexis Tsipras's new anti-austerity government to seek a compromise with bailout creditors.

The ECB justified the move by saying prospects appear uncertain for a new deal between the radical left government in Athens and its international bailout creditors. Greek banks retain access to emergency lending, but at a higher cost and subject to ECB approval.

A defiant Greece said yesterday it would not be "blackmailed" by its European Union partners but that it did want to find a joint solution to its debt and austerity crisis.


"Greece does not aim to blackmail anyone but will not be blackmailed either," a government official said, adding that Athens would respect the "popular mandate" it won in last month's snap election.

"The ECB's decision ... is an act of political pressure to quickly reach a deal."

Taoiseach Enda Kenny warned Greece that its prospects of securing an Irish-style deal on the country's crippling debts rests upon whether the government engages "constructively" with European leaders.

Speaking in Brussels, Mr Kenny said Ireland's support for Greece's bid to renegotiate its massive international bailout is conditional on whether the country is prepared to enter a phase of realistic negotiations.

Describing the scale of Greece's economic woes as "difficult", Mr Kenny said Ireland clearly supports its EU partner in tackling the "humanitarian issues" it is currently facing back home.

But in a clear warning that eurozone leaders are becoming impatient with Greece's current approach, Mr Kenny said the government must be prepared to "negotiate and engage constructively" with other member states.

Mr Tsipras and finance minister Mr Varoufakis have been crisscrossing Europe to win support from partners for their plan to win debt relief and end austerity policies but have so far received little other than warnings to avoid reneging on commitments under the country's existing bailout programme.

Irish Independent

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