Greece sticks to anti-austerity demands after ECB severs funding lifeline

Greek Finance Minister Yanis Varoufakis 

Greece held fast to demands to roll back austerity as the European Central Bank turned up the heat before Finance Minister Yanis Varoufakis was to meet one of his main antagonists, German counterpart Wolfgang Schaeuble. The encounter in Berlin comes hours after Greece lost a critical funding artery when the ECB restricted loans to its financial system. That raised pressure on the 10- day-old government to yield to German-led austerity demands to stay in the euro zone. Shares of Greek banks plummeted. The government “remains unwavering in the goals of its social salvation program, approved by the vote of the Greek people,” according to a Finance Ministry statement issued overnight. It’s aim is “coming up with a European policy that will definitively put an end to the now self-perpetuating crisis of the Greek social economy.” The next move is up to Prime Minister Alexis Tsipras, who swept to power promising to reverse five years of spending cuts that accompanied 240 billion euros (USD272 billion) of bailout loans. While he´s retreated from demands for a debt writedown, he´s so far sticking to promises to increase pensions and wages that breach the conditions for financial aid. Bloomberg