Greece’s Tsipras set for Schaeuble showdown at Davos

Greek Prime Minister Alexis Tsipras readied to lock horns with his eurozone foe German Finance Minister Wolfgang Schaeuble on Thursday in what is certain to be one of the headline events at the World Economic Forum in Davos.

Leftist leader Tsipras burst on to the international scene a year ago, winning elections on a promise to face down Greece’s eurozone creditors which triggered six months of turbulent negotiations that nearly saw Athens thrown out of the euro.

Twelve months to the week since he was elected, the 41-year-old premier is in Davos brushing shoulders with bankers and billionaires after caving to the eurozone leaders last July by agreeing a drastic third bailout in return for major reforms his government had until then resisted.

“Talking with Sigmar Gabriel at Davos, we stressed the importance of reviving the economy with socially just reforms,” Tsipras said in a tweet, after meeting with Germany’s vice-chancellor on the sidelines of the forum on Wednesday.

He also met with European Economics Affairs Commissioner Pierre Moscovici and US Vice President Joe Biden.

“The leaders agreed on the importance of moving forward as quickly as possible on Greece’s economic reforms, including serious discussions with creditors on debt relief,” the White House said in a statement after the talks with Biden.

Later on Thursday Tsipras sits on a panel with Germany’s powerful finance minister Schaeuble who negotiated hard against Tsipras and his flamboyant then-finance minister Yanis Varoufakis during an epic battle of wills last year.

– More pension reforms –

The duel between Greece and its 18 eurozone partners ended at a July summit with Tsipras signing up to a 84 billion euro bailout that saved Athens from default.

Also present at the panel on Thursday will be France’s reform-minded Prime Minister Manuel Valls and Dutch Prime Minister Mark Rutte, who currently leads the EU’s six-month rotating presidency.

Moscovici told AFP on Wednesday that Greece’s latest proposal to cut the cost of its pension system is ambitious but still falls short of creditors’ demands.

Greece spends a greater percentage of its GDP on pensions than any other EU country, and has proposed a wide-ranging plan that has been broadly welcomed by creditors though caveats remain.

“This plan is global and has an ambition that is clearly greater than what has been done in the past,” Moscovici said.

“But that said, we believe that serious discussions are still needed to fix the right parameters,” he added.

Greece must save 1.8 billion euros from state spending on pensions under the three-year bailout that is overseen by the European Commission, the EU’s bailout fund, the European Central Bank and the IMF in July.

Those reforms are necessary in order for creditors to then open talks about reducing Greece’s huge debt, a key demand of both Tsipras and the International Monetary Fund that is worried about the country’s debt load.