Greek leaders tour Europe with eyes on debt prize

2nd February 2015, Comments 0 comments

Greece's radical new leaders on Monday embarked on a campaign to win support from European governments and investors in their bid to renegotiate a massive 240-billion-euro ($270 billion) bailout.

Prime Minister Alexis Tsipras visited Cyprus in his first foreign trip since the momentous January 25 election and Finance Minister Yanis Varoufakis went to London in a flurry of diplomatic efforts.

US President Barack Obama gave them a boost on Sunday by warning Europe against "squeezing" Greece but Britain's finance minister on Monday said a standoff over Greece posed a major risk for the world economy.

Varoufakis also held talks with City of London bankers hosted by US giant Merrill Lynch, with a Greek government source saying he wanted to encourage investment and reassure bondholders.

Tsipras has blamed Germany for driving the tough austerity programmes that his hard-left government has pledged to end and German Chancellor Angela Merkel on Monday said "tough talks" lay ahead.

- 'Competence over chaos' -

Tsipras, who is travelling to Italy on Tuesday and Brussels on Wednesday to meet European Commission President Jean-Claude Juncker, said that he wanted a debt agreement for "all the peoples of Europe".

He also lashed out at the "troika" system monitoring Greece's economy -- the International Monetary Fund, European Commission and European Central Bank -- saying it did not have "legal institutional status".

Varoufakis began his anti-austerity tour in Paris on Saturday, saying that Greece did not want any more bailout money and that he wanted to see a global agreement on the debt situation "by the end of May".

Tieless and wearing a bright blue untucked shirt, Varoufakis looked relaxed as he shook hands with the more formally-dressed British Chancellor of the Exchequer George Osborne.

After the talks with Varoufakis, a graduate of Essex University near London, Osborne said it was time for Europe as a whole "to choose competence over chaos".

"It's clear that the standoff between Greece and the eurozone is fast becoming the biggest risk to the global economy," the British finance minister said.

"I urged the Greek finance minister to act responsibly, but it's also important that the eurozone has a better plan for jobs and growth," he said.

European stock markets closed up on Monday after a volatile week of trading since the Greek election and the benchmark index in Athens rose by 3.7 percent after Merkel said Berlin wanted "friendly relations" with Greece and invited Tsipras as a "welcome guest".

Tsipras has tried to calm nerves by saying he did not intend to renege on commitments to the EU and IMF.

"It has never been our intention to act unilaterally on Greek debt," he said in a statement to Bloomberg News.

But the country "needs time to breathe and create our own medium-term recovery programme."

A Greek government source in London even lashed out at British weekly The Economist for a front cover showing the Venus de Milo statue brandishing a gun and appearing to threaten Germany with it.

"It's completely obnoxious and ridiculous to suggest we could blackmail Europe," the official told reporters.

- 'Respect the rules' -

Merkel on Saturday ruled out fresh debt relief, telling the Hamburger Abendblatt daily: "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt."

Despite a restructuring in 2012, Greece is still lumbered with debts of more than 315 billion euros, upwards of 175 percent of gross domestic product (GDP) -- an EU record.

But in its first week in power, the government scrapped the privatisation of Greece's two main ports and the state power company and announced a major increase in the minimum wage.

Syriza's stunning election success sent shockwaves through Europe and has encouraged other anti-austerity parties including in Spain and Ireland.

At least 100,000 people took to the streets of Madrid on Saturday in support of the Spanish party Podemos, which has surged in polls ahead of elections late this year.

But Spain's Budget Minister Cristobal Montoro on Monday rejected "changing the rules" over Greece's bailout, noting that Spain had respected similar austerity measures imposed by international creditors.

"Joining Europe is voluntary, and we belong to that club on the condition we respect the club's rules, because it is in everyone's interest we do so," Montoro told Spain's public television channel TVE.

© 2015 AFP

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