The shadow of Eurogroup chairman Jeroen Dijsselbloem is cast on a wall as Greek Prime Minister Alexis Tsipras waits to greets him during their meeting in Athens
A day after Greece appeared on a collision course with its creditors, new radical left Prime Minister Alexis Tsipras has tamped down the rhetoric by vowing to pay off debts and not act unilaterally.
Tsipras sought to repair relations with Greece’s creditors ahead of a diplomatic push to win support for his economic program, as euro area officials said they’re looking for concessions from the new government.
Greece will repay its debts to the European Central Bank and the International Monetary Fund and reach a deal “soon” with the euro-area nations that funded most of the country’s financial rescue, Tsipras said in a statement e-mailed to Bloomberg News on Saturday.
“The deliberation with our European partners has just begun,” he said. “Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole.”
Bond yields surged on Friday after Finance Minister Yanis Varoufakis said the new government will turn its back on the rescue program that allowed Greece to pay pensions and public wages for the past five years in exchange for a punishing regime of spending cuts that wiped out 25 percent of its economy.
Jeroen Dijsselbloem, chairman of the euro area finance ministers’ group, said he welcomed the prime minister’s comments. Their divisions had been laid bare during a meeting in Athens on Friday.
“It is now up to the Greek government to determine its position on how to move forward,” Dijsselbloem said in a text message. “Further decisions will be taken jointly in the Eurogroup in the coming weeks.”
The danger for Tsipras, who took won power in a Jan. 25 election, is that both the country’s banks and the government could be left without funding. Ending the bailout program could see Greek banks effectively excluded from ECB liquidity operations and the government is still shut out of international markets. Former Prime Minister Antonis Samaras said last month the government may run short of financing as early as March.
“Europe will continue to show solidarity with Greece, as well as other countries particularly affected by the crisis, if these countries undertake their own reforms and savings efforts,” German Chancellor Angela Merkel said in an interview with Hamburger Abendblatt. AP/Bloomberg
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