Monday 19 March 2018

Left threatens to 'tear up the barbaric' Greek bailout

Alex Spillius in Athens

The leader of a left-wing coalition in Greece pledged to form a government committed to tearing up the terms of his country's "barbaric" €130bn bailout deal, as political paralysis threatened to grip the country.

Alexis Tsipras, whose anti-austerity Syriza group finished a surprising second in Sunday's election, said the rescue plan should be renegotiated from scratch.

"The public verdict has clearly nullified the loan agreement and pledges sent to Europe and the IMF," he said.

Taking an abrasive approach that stunned leaders in Brussels and Berlin, Mr Tsipras promised to write to European finance ministers to declare the deal invalid because the mainstream parties that combined to support it, Pasok and New Democracy, had together won only 32pc of the votes.


The triumph of anti-bailout parties in Greece has heightened fears the country could prove almost ungovernable and eventually leave the euro or prompt a collapse in what confidence is left in other weak economies.

Economists said that without a government in Athens, the bailout was essentially on hold. A quarterly visit scheduled for next week by officials from the IMF to inspect compliance with the bailout's terms is expected to be postponed.

Athens was due to itemise €11bn in government cuts by June in order to receive the next €5bn loan instalment, but that too is likely to be delayed.

New elections by the middle of June are considered more likely than not after angry voters scattered to several smaller parties, ranging from leftists to an extreme right group.

The prospect of an outright winner in a second poll appears dim. Mr Tsipras has until the end of tomorrow to form a coalition, but senior party members admitted privately it will be near impossible for him to summon a 151 majority in the 300-seat parliament.

An immovable stumbling block is the Communist Party of Greece, which refuses to ally with any pro-EU blocs. Despite the tough anti-austerity rhetoric, Syriza wants Greece to stay in the eurozone.

Mr Tsipras, a 37-year-old former Athens town councillor, challenged Evangelos Venizelos, leader of the socialist Pasok, and Antonis Samaras, the head of conservative New Democracy, to renege on the austerity pledges they made to secure the bailout late last year.

Greece's condition has only worsened since, with unemployment rising to 22pc and the economy entering a fifth consecutive year of recession.

This appeared to be an attempt to bring Pasok to the negotiating table, or perhaps attract some of its members into an alliance after the next election.

Mr Samaras swiftly refused to put pen to paper. "He is asking me to put my signature to the destruction of Greece. I won't do this," he said.

Mr Venizelos also rejected the challenge but did not rule out working with Syriza. His meeting with Mr Tsipras, he said, would be "substantive". He added that a national unity government with the participation of all parties with a pro-EU orientation was the only solution.

Yiannis Bournous, a senior ally of Mr Tsipras, said Greeks had delivered a message to Angela Merkel, the German chancellor, and the IMF that "super-austerity policies are reaching a dead end in Europe".

"They either choose radical change of policy or collapse whenever they have elections," he said.

He said Greek government funds would be used to keep the country functioning, not pay profit-making interest rates.

With warnings continuing from Brussels that Greece should stick to the path of tough reforms, such bravado provoked dismay among economists. (© Daily Telegraph, London)


Irish Independent

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