Greek finance minister Yanis Varoufakis has announced he will ask EU partners for further assistance in the coming weeks to “smooth over a cash-flow hump” on Greece’s EU loans.
Days after EU finance ministers agreed a four-month EU/IMF loan-extension to the €240 billion Greek programme, German finance minister Dr Schäuble warned Athens to stick to the agreed conditions for its four-month loan extension or put external funding at risk.
In an interview marathon over the weekend, both Greek and German finance ministers tried to put very different spins on last week’s deal in Brussels.
Mr Varoufakis vowed to begin work on detailing reforms he has vowed to implement by April, and to repay International Monetary Fund (IMF) loans of €1.5 billion due in March.
Debt rescheduling
But in interviews with the Associated Press and Germany’s
Handelsblatt
business daily, published today, he said he would ask for debt rescheduling talks with European institutions. “We intend to being the conversation with our partners and institutions regarding debt sustainability and debt rescheduling,” said Mr Varoufakis, saying it was “impossible” for Greece to meet obligations of almost €11.5 billion between June and August.
He said he would not seek a loan write-down or haircut – “haircut is a dirty word” – but would seek flexibility in repayment of its loans to the European Central Bank (ECB).
Mr Varoufakis said he was aware the Frankfurt institution was unlikely to be enthused by such talk, but saw no alternative.
"What we can do is package a deal that makes these repayments palatable and reasonably doable as part of our overall negotiation regarding the Greek debt," he told the Associated Press. In the Handelsblatt interview, Mr Varoufakis floated the idea of credit swaps: issuing sovereign bonds whose returns were tied to Greece's GDP figures.
“Then our creditors would also have an interest in Greece’s economy starting to grow again,” he said.
In Berlin, however, German finance minister Wolfgang Schäuble has warned his Greek colleague not to unpick last week’s agreement. It was “not his problem”, he said, how the hard-left Syriza government squared the loan extension it asked for last week with its election promise to do nothing of the sort.
“I have confidence in the Greek government to implement the necessary measures, establish a more efficient tax administration and ultimately to fulfil the conditions,” said Dr Schäuble.
“We made a clear agreement in the Eurogroup. Mr [Alexis] Tsipras made a promise. If Greece doesn’t stick to that, there will be no further aid.”
In an interview with the Bild am Sonntag, however, Dr Schäuble saved his strongest words for the Germany's leading tabloid, urging it to stop cranking up fear over Greece's EU/IMF programme.
In recent days Bild has stepped up its five-year-long campaign against Greece, urging MPs not to back a further loan extension for Greece. On Saturday it published a list of how all 587 MPs voted in Friday's Bundestag vote – in which just 45 voted against or abstained.
Euro area votes
The Bundestag vote was one of several parliamentary votes across the euro area required for a four-month extension of the Greek programme with its 18 eurozone partners.
Dr Schäuble agreed in the Bild interview that German loans and guarantees top €60 billion to Greece, leaving each German citizen liable for €1,000 per head. But he pointed out that the lifespan of the liabilities was up to 32 years.
“Abstract calculations are misleading. You are a reputable newspaper and I am trying to do serious politics,” he said. “We Germans are better off than most people in the planet and most people who lived before us ... your readers shouldn’t let their joy for life be ruined.”
