Cyprus Mail

Greece’s Tsipras digs in against bailout

A defiant Prime Minister Alexis Tsipras urged Greeks on Wednesday to reject an international bailout deal, wrecking any prospect of repairing broken relations with EU partners before a referendum on Sunday that may decide Greece’s future in Europe.

Less than 24 hours after he wrote to creditors offering to accept their bailout offer if some conditions were changed, Tsipras repeated in a televised address his charge that Greece was being “blackmailed” and quashed rumours that he might delay or call off the vote.

The televised address added to the frantic and at times surreal atmosphere of recent days in which acrimonious messages from the leftist government have alternated with late-night offers of concessions to restart negotiations.

A day after Greece became the first advanced economy to default on the IMF, long lines at cash machines provided a stark visual symbol of the pressure on Tsipras, who came to power in January vowing to end austerity and protect the poor.

“A ‘No’ vote is a decisive step towards a better agreement that we aim to sign right after Sunday’s result,” he said, rejecting the repeated warnings from European partners that the referendum would effectively be a vote on whether Greece stays in the euro or returns to the drachma.

European Council President Donald Tusk retorted in a tweet: “Europe wants to help Greece. But cannot help anyone against their own will. Let’s wait for the results of the Greek referendum.”

Euro zone finance ministers were discussing the Greek request on a conference call and Tsipras said he would respond “immediately” to any positive signals.

“The Greek government will remain at the negotiating table until the end and will be there on Monday as well,” he said.

But the head of the Eurogroup, Jeroen Dijsselbloem said he saw “little chance” of progress after Tsipras’s latest comments.

Global financial markets have reacted remarkably calmly to the widely anticipated Greek default, strengthening the hand of hardline euro zone partners who say Athens cannot use the threat of contagion to weaker European sovereigns as a bargaining chip.

In a letter to creditors seen by Reuters, Tsipras agreed to accept most of their demands for taxes and pension cuts and asked for a 29 billion euro loan to cover all debt service payments in the next two years.

However even if negotiations do restart after the referendum, Germany and others made clear that any talks on a new programme would have to start from scratch with different conditions.

The exasperated tone to public comments of European leaders exhausted by the chaotic turnarounds of the past few days offered little hope of a breakthrough.

“This government has done nothing since it came into office,” German Finance Minister Wolfgang Schaeuble said in a speech in the lower house of parliament in which he accused Athens of repeatedly reneging on its commitments.

“You can’t in all honesty expect us to talk with them in a situation like this,” he said.

On the third day of a bank closure, the costs of the capital controls were biting deeper, with long lines forming at many ATMs and limited amounts of cash being doled out to pensioners. Even with a withdrawal limit of only 60 euros a day, there were signs of banknote shortages, with bankers saying 50-euro and 20-euro notes were running low.

Kiki Rizopoulou, a 79 year-old pensioner from Lamia in central Greece had to travel to Athens to collect her pension, spending 20 euros of the 120 euros she was allowed to take out.

“I already have to pay back 50 euros that I owe. It’s embarrassing,” she said.

An opinion poll showed opposition to the bailout in the lead but also that the gap had narrowed significantly as the bank closure and capital controls began to bite. But the hardship facing pensioners added to the pressure facing Tsipras, who has indicated he will resign if he loses the referendum.

Europe’s top human rights watchdog criticised the haste with which the vote had been arranged but posters from the ruling Syriza party calling for a “No” vote started to appear in central Athens. The centre-right opposition also ran television spots mocking previous comments from the government that capital controls would never be imposed.

The Tsipras letter contained only a single sketchy reference to labour market reform, which was one of the creditors’ key demands to make the Greek economy more competitive, and no mention at all of frozen privatisations, another bugbear.

“The new framework will be legislated in autumn 2015,” it said without saying what measures it contained. Tsipras’ leftist government wants to restore collective bargaining rights scrapped under previous bailout-driven reforms, and opposes a demand to make collective layoffs easier in the private sector.

Tsipras did agree to implement immediately a range of measures recommended by the Organisation for Economic Cooperation and Development to make it easier to do business and open up closed business sectors.

In the letter, he asked to keep a discount on value added tax for Greek islands, stretch out defence spending cuts and delay the phasing out of an income supplement to poorer pensioners.


European financial markets remained strikingly calm in the light of the upcoming referendum, the IMF default and heightened concerns about the risk of Athens sliding out the euro.

The lack of panic or contagion to other euro markets stood in marked contrast to 2011, when the Greek crisis was perceived as a threat to the future of the single currency.

And this lack of overspill has emboldened the more hawkish of Greece’s sovereign creditors, including those in Berlin, who insist Greece had been effectively ringfenced by a host of financial buffers and its fate would not undermine the integrity of the euro in the same way it did four years ago.

French Finance Minister Michel Sapin, who has been Greece’s strongest sympathiser in the euro zone, told RTL radio: “The aim is to find an agreement before the referendum if possible… But it’s dreadfully complicated.”

The ECB’s policymaking governing council was to meet in Frankfurt to decide whether to maintain, increase or curtail emergency lending that is keeping Greek banks afloat despite a wave of deposit withdrawals and the state’s default.

Germany’s Bundesbank was leading hawks who argue that the ECB cannot go on providing funds through the Greek central bank as before to lenders that are backed by an insolvent sovereign.

One possible move would be to increase the “haircut” charged on Greek government bonds presented as collateral for funds in light of the IMF default.

A poll by the ProRata institute published in the Efimerida ton Syntakton newspaper showed 54 percent of those planning to vote would oppose the bailout against 33 percent in favour.

However a breakdown of results between those polled before and after Sunday’s decision to close the banks and impose capital controls showed the gap narrowing.

Of those polled before the announcement of the bank closures, 57 percent said they would vote “No” against 30 percent who would vote “Yes”. However among those polled after, the “No” camp fell to 46 percent against 37 percent for “Yes”.

Related Posts

IRC calls for evacuation of refugees trapped on islet between Greece, Turkey

Reuters News Service

Iranian tanker reloads oil confiscated by U.S. in Greece

Reuters News Service

Greece to exit EU’s ‘enhanced surveillance’ framework after 12 years

Reuters News Service

Nicosia and Athens monitor Turkish movements with drillship

Sarah Ktisti

Greek PM tells nation was unaware of phone tapping of opposition party leader

Reuters News Service

Greek PM apologises to Pasok leader over surveillance

Reuters News Service


Comments are closed.