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Greek debt relief at top of Tsipras agenda, party source says

Former Greek prime minister and leader of leftist Syriza party Alexis Tsipras hugs coalition partner and leader of the Independent Greeks party, Panos Kammenos after winning the general election in Athens

By Renee Maltezou

Negotiations over Greece’s debt will top the agenda for Prime Minister-elect Alexis Tsipras from Monday as he prepares for a return to office following a surprisingly easy national election win, a senior source from his party said.

Tsipras and his leftist Syriza party clinched a clear victory in Sunday’s poll as voters put aside his dramatic U-turn over Greece’s international bailout to offer him a second chance to steer a battered economy to recovery.

Syriza said on Sunday it plans to govern in a coalition with the small right wing Independent Greeks party, the same partner Tsipras chose after winning the country’s previous general election in January.

But to strengthen his hand in talks with EU partners over how to ease Greece’s debt burden, he will seek a broader consensus among the parties he defeated on Sunday, the party source said.

“We will continue negotiations in the coming period, with the debt issue being the first and most important battle,” the source said.

“We will ask all political forces to support our efforts.”

Some European governments, particularly Germany, are opposed to cutting Greece’s debt – a so-called haircut – but not averse to stretching out its repayment schedule.

Euro zone officials told Reuters last week that governments are ready to cap Greece’s debt-servicing costs at 15 percent of GDP annually over the long term.

That would mean the nominal payment would be lower if the Greek economy struggled, higher if it was more robust, they said.

Tsipras is also planning to form a national council for European policy, including representatives of parties other than the Independent Greeks and which would advise the finance minister, the Syriza source said.

Centre-left daily newspaper Ethnos tipped Euclid Tsakalotos, the former finance minister who brokered terms of the bailout accord in August, to be re-appointed.

JP Morgan analyst Malcolm Barr said he expected some sort of debt restructuring to be in place by early next year.

“We continue to think that… the (bailout) programme will make enough progress to allow a restructuring of loans from euro area countries by the end of the first quarter of 2016,” he wrote in a note.

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