An employee of the Stock Exchange walks next to a display showing stock price movements in Athens
The European Parliament’s president arrived in Athens yesterday for a visit closely watched for signs of a potential clash between Greece’s new left-wing government and its bailout lenders.
Martin Schulz is the first European Union official to meet Prime Minister Alexis Tsipras, whose new Cabinet alarmed the Greek stock market Wednesday with promises to renege on a series of key budget commitments made by previous administrations in exchange for 240 billion euros in rescue loans.
Schulz will meet government and opposition officials a day ahead of Jeroen Dijsselbloem, the chairman of eurozone finance meetings.
On Wednesday, incoming ministers announced they would scrap several major privatizations, restore the minimum wage to previous levels and rehire some suspended public workers. All were budget cuts demanded by bailout creditors — other eurozone countries and the International Monetary Fund.
The statements prompted a quick warning from EU officials and sent local investors into panic on the prospect that Greece might be cut off from its financial lifeline. The Greek stock exchange fell by more than 9 percent Wednesday.
Ahead of his visit, Schulz said there was no issue of Greece leaving the euro or of being forced out.
“This is in no one’s interest,” Schulz wrote in an online article. “Yet, Prime Minister Tsipras needs to realize that to succeed he must reach out for compromise both inside and outside the country.”
Schulz noted Greece’s economy was more stable than it was when the country’s financial crisis began five years ago, but warned that “if the newly formed Syriza government will be a government of ‘no to everything’, then Tsipras’ momentum might be short-lived.”
European officials have also been alarmed by a public rebuke sent by Tsipras’ office Tuesday, before his government had even been sworn in, to the EU over a joint statement threatening further European sanctions against Russia over developments in Ukraine.
Tsipras’ office said Greece had not been consulted on the declaration, and didn’t consent to its content.
Although Greece wasn’t the only EU member state annoyed by how the statement was issued — Cypriot officials have also said publicly they were not given enough time to comment on the document — it was the only one to issue an official complaint.
New Foreign Minister Nikos Kotzias was to attend yesterday’s extraordinary foreign affairs meeting in Brussels to discuss the sanctions. Tuesday’s public statement had raised fears that Greece might veto a sanctions decision, potentially as a means of a new government flexing its muscles.
But such a move was unlikely, analysts said. Elena Becatoros, Athens, AP
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