Greece Plays for Time as Bailout Clock Ticks Down
Greece on Sunday expressed confidence that a deal with the European Union (EU) over its loathed bailout could be reached, but also warned the February 28 deadline may be too tight.
As Athens was steeling itself for a meeting of eurozone finance ministers in Brussels on Monday, Prime Minister Alexis Tsipras told media in Germany, Europe’s sceptical paymaster, “we don’t need money, we need time to realise our reform plans.”
He said he was holding out for “a win-win solution,” because “I want to save Greece from tragedy and prevent Europe from being divided.”
“I promise you Greece will be a different country in six months,” he was quoted as saying by news weekly Stern.
Finance Minister Yanis Varoufakis also suggested the talks may run over deadline, though he said he was sure Greece’s high-stakes gamble would pay off.
“Our strong stance, based on logic, will lead to an agreement, even at five minutes past the hour,” he said.
Greece risks being forced out of the eurozone if a deal is not found by the end of the month.
A Greek exit from the euro, or “Grexit”, “could lead to a run on the banks” in other bailout countries such as Portugal and Spain, warned Barry Eichengreen, an economics professor at Berkeley University, in an interview with the German newspaper Die Welt on Sunday.
Greece’s new leftist government wants a “bridge programme” which would tide the country over while it negotiates a new deal on an austerity programme it says has created widespread poverty.
Tens of thousands of Greeks took to the streets on Sunday in support of their government calling on Brussels to loosen the noose of austerity.
Smaller rallies were also held in Lisbon, Madrid and Paris in solidarity against what French organisers dubbed “the Goliath of finance”.
“I’m not afraid of anything, whatever bad was going to happen has already happened,” 62-year-old pensioner Dimitra told AFP in Athens, referring to five years of severe austerity in the debt-laden country.
Varoufakis said consultations on Athens’ demands for a radical restructuring of its bailout had made him “optimistic”, but added that there were still issues of friction such as privatisations and labour rights.
And he insisted: “There is no plan B.”
The European Union and the International Monetary Fund bailed out Greece in 2010, and again in 2012 to the tune of some 240 billion euros ($273 billion), plus a debt write-down worth more than 100 billion euros.
In return for the bailouts, the centre-right Greek government at the time agreed to a series of stinging austerity measures, and the much-resented oversight by the EU, IMF and European Central Bank “troika” of creditors.
Tsipras and his hard-left Syriza party won elections last month on promises to ditch the austerity programme, and he laid out his plans for a new deal to his peers at his first EU summit last week.
Merkel recognised the need for compromise, but also called for Greece to respect the conditions of the bailout.
Tsipras said on Saturday that the meeting of the 19 eurozone finance ministers, which kicks off at 1400 GMT Monday, will be “difficult”, adding that “it is early to speak of an agreement.”
A government source echoed the sentiment, saying it was “not certain” there would be a decision, describing the negotiations as “a struggle of endurance” and slamming those involved in “scaremongering”.
The EU has urged Greece to prolong its bailout, without which it fears Athens will default on its debts.
The European bloc is also unwilling to let Greece off the hook while other EU member states that received bailouts were forced to implement painful reforms.