Greek PM promises not to spring any surprises on creditors

European Parliament president Schulz says Alexis Tsipras seeking ‘common ground’

 Greek prime minister Alexis Tsipras (R) and Martin Schulz (L), president of the European Parliament, at  a press conference after their meeting in Athens on Thursday. Photograph: Orestis Panagiotoou/EPA.

Greek prime minister Alexis Tsipras (R) and Martin Schulz (L), president of the European Parliament, at a press conference after their meeting in Athens on Thursday. Photograph: Orestis Panagiotoou/EPA.

 

Greek prime minister Alexis Tsipras has promised not to spring any surprises on the country’s troika of official creditors in the first face-to-face meeting with European officials since his election victory.

Mr Tsipras gave assurances that Greece will not make any unexpected moves regarding its finances in about two hours of talks with European Parliament president Martin Schulz in Athens on Thursday.

“It’s important that he wants to find common ground with his peers,” Mr Schulz said at a joint press conference with Mr Tsipras.

“There are issues related to the financing of Greece, which shouldn’t be tackled with unilateral actions. I realised today that Tsipras is not going to do anything like that.”

Stocks rebound

Stocks in Athens rebounded, after plunging to lows not seen since the peak of the debt crisis on Wednesday when ministers pledged to increase the minimum wage and halt privatizations.

Banks, in which Greek taxpayers are the biggest shareholders, bounced after losing about $11 billion of their value in the previous session.

“We will not continue with the failed recipe of austerity,” Mr Tsipras said, standing next to Mr Schulz.

He said he plans to negotiate “with safety” and secure “stability” as he implements his agenda.

Dijsselbloem visit

Mr Tsipras said he wants to replace Greece’s bailout program with a “reform program” that would include measures to crack down on tax evasion and corruption.

That conversation will continue on Friday when Jeroen Dijsselbloem, chair of the euro group of finance ministers, is due in the Greek capital.

“In all honesty if you sum up all their promises then the Greek budget will very quickly be out of balance and then further debt relief won’t help anyway,” Mr Dijsselbloem said in Amsterdam on Thursday. “We want to keep Greece in the euro zone, in the European Union, but that also requires the Greeks to meet their commitments.”

Standard and Poor’s said it may cut Greece’s credit rating, already five levels below investment grade, should the new government fail to agree more financial support for the country.

“There are very mixed signals from the Greek government on how they want to proceed with the program and with the reforms in Greece,” ECB Governing Council member Bostjan Jazbec said in an interview in Ljubljana on Thursday.

“Our concerns and hopes are related to how the Greek government will understand the situation and react to it.”

Difficult choice

While Mr Tsipras came to power on a platform of writing down Greek public debt, raising wages and halting spending cuts all while remaining in the euro, European policy makers have told him he’ll have to choose which of those goals to aim for.

French economy minister Emmanuel Macron, speaking in Paris on Thursday, suggested little leeway for negotiation, saying that there’s no “waiver” for Greece’s public debt.

While it’s normal to have talks on Greece’s debt burden, the country also has “commitments” to the euro zone that need to be respected, Mr Macron told reporters.

Greece has to refinance €1 billion of Treasury bills on February 6th and another €1.4 billion a week later, according to data compiled by Bloomberg.

The government would typically do that mostly through local banks. Such a move though would add extra stress to the system as it tries to staunch the outflow of deposits.

“Talks won’t be easy, they never are in Europe,” finance minister Yanis Varoufakis (53), a university economist, said on Wednesday. “There will be no duel, no threats, or an issue of who blinks first.”

Bloomberg