Prime Minister Alexis Tsipras pleasantly surprised Greeks with the announcement of a series of measures to boost the social welfare state, to provide aid to vulnerable groups of the society and tax breaks to low-incomers, to cut state expenditure and to overhaul the institutions. The Greek PM also rejected the Eurogroup proposal for a bailout extension and asked for a bridge program until June, instead.
As expected, the country’s lenders did not share the feelings of relief heard by the Greece’s poor. First of all, it was European Commission President Jean-Claude Juncker in Germany’s Nauen who criticized Tsipras before holding talks with Social Democrats (SPD), Merkels’ coalition partner.
Monday morning, J-C Juncker advised Greece’s new government not to assume the euro zone would simply accept all the promises its leftist leader Alexis Tsipras made to Greek voters about scrapping economic reforms.
Juncker told reporters that Tsipras had “only partly addressed” Brussels’ concerns about his plans in a speech in Athens on Sunday. (Reuters)
Speaking to Bloomberg, Micahel Fuchs, deputy chairman of Merkel’s party Christian Democratic Union (CDU) warned Greece that “there is no free meal”.
“We are prepared for the option that Greece abandons the euro. There is no way out for Greece when it comes to its debt obligations.
We are in complete disagreement this time. And this because what they want to do, have no connection whatsoever with the agreements. There is no free meal.”
From Istanbul where the G20 meeting is taking place, French Finance Minister Michel Sapin said also on Monday that a compromise can be reached between Greece and its European partners over a fiscal and economic plan and called for transitional funding under the European rules
“I think there’s flexibility to find a short-term solution” that would give Greece financing while a longer-term program for the country is hashed out, Mr. Sapin said. “The words will be important” in how a short-term financing plan is described, he noted, referring to whether it would be considered bridge financing or an extension of the current bailout program.
Sapin also said that Europe is in far better shape to withstand any contagion from Greece’s volatile economic and political situation, saying “it’s another world compared to 2012” when Greece’s debt crisis reached a fever pitch.
Also from the Bosporus, German FinMin Wolfgang Schaeuble remained stuck to his rigid position and warned Greece that “things will be difficult for Greece without a program.”
“No one obliges Greece to have an assistance program. I have not yet figured out how the new Greek government will deal with its problems.”
If Greece wants an agreement on a bridge-bridge, they will need a program, as stated by Draghi [ECB]. How will the markets react if there is no program for Greece?”
In London, Prime Minister David Cameron has reportedly consulted with leading officials from the Treasury and Bank of England in preparation for a possible Greek exit from the eurozone, despite the fact that UK is not a EZ-member.
In Wien Austrian Chancellor Werner Faymann urged Europe to find a way to keep Greece in the euro zone, while holding Athens to its commitments under an international bailout.
“The question is finding a solution between the content of the framework agreed in the past and the efforts of the new (Greek) government. That is not the case at the moment and that is why a certain concern has to be expressed that this path has to be found,” Faymann told a joint news conference with Greek PM Alexis Tsipras, after talks between the two men that lasted more than an hour.
A day earlier, Fayman criticized towards Austrian daily Kurier, that “Merkel’s economic policy was too timid.”
In Athens, Finance Minister Yanis Varoufakis said that Greece “will accept 70% of reforms outlined in current bailout if the lenders agree to suspend or remove the remaining 30%” of the demands.
Athens Stock Exchange opened with losses that continue all through the Monday session. At 03:46 pm ASE is at -5.55% and 750.64 units.
PS If only Tsipras manages to win some allies for the Eugrogroup on February 11th…