Greece defiant ahead of critical EU talks

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ATHENS: Greece on Wednesday refused to give up demands for a new fiscal deal with its EU creditors and a temporary cash lifeline hours before critical talks that will determine the country’s solvency.

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Addressing parliament ahead of a confidence vote, Prime Minister Alexis Tsipras said he would not bow to German demands that his hard-left government first complete a pending bailout loan agreement with the EU and the IMF.

“I want to repeat today, no matter how much (German Finance Minister Wolfgang) Schaeuble asks it, we are not going to ask to extend the bailout,” Tsipras said to applause from his lawmakers.

The government carried the vote by 162 votes in favour and 137 against.

The EU had earlier warned Greece’s new leftist government to scale back its plans to revise the country’s unpopular bailout if it wants to secure a six-month lifeline that will enable it to meet pressing debt repayments in the coming months.

European Economic Affairs Commissioner Pierre Moscovici said the existing bailout deal was “the anchor” on which discussions should be held, while Schaeuble ruled out any renegotiation of the agreement.

But Tsipras insisted early on Wednesday: “As long as we have the people on our side we cannot be blackmailed or intimidated by anyone.”

He added: “I am confident that our European peers will be responsive to our proposals. I cannot believe there are powers in Europe that want to lead a people to humiliation, to take vengeance and punish, when they know this can only harm us all.”

Speaking during a G20 meeting in Istanbul, Moscovici said the Greek people’s desire for change should not be “brushed aside” but Athens should also keep in mind voters in other European countries.

Schaeuble was even more emphatic, telling reporters in Istanbul that “it’s over” if Greece doesn’t want the final tranche of its multi-billion euro aid programme on the current terms, according to Bloomberg.

Almost eight out of 10 Greeks approve of the government’s policies, a GPO poll commissioned by Mega TV showed Tuesday, and over 73 percent expect a compromise solution to be forged between Athens and its EU peers.

Greece was racing to fine-tune a 10-point plan aimed at persuading its international creditors to reluctantly rethink the terms of the 240 billion euro ($270 billion) bailout that Greece accepted during the financial crisis.

At an emergency meeting of eurozone finance ministers Wednesday, Greece will plead its case for stop-gap financing with a view to clinching a reform deal that will not exacerbate poverty, to run from September 1.

According to a finance ministry source, the government is ready to cooperate on 70 percent of its bailout obligations but wants to overhaul the remaining 30 percent — which it would replace with the 10-step plan.

It will offer a series of measures including lower budget surplus targets and cutting debt through a swap plan to replace its current EU-IMF bailout deal obligations.

The initiative was welcomed by the Greek market, which clawed back Monday’s losses to rise more than 8.0 percent on Tuesday, while the benchmark 10-year bond also recovered ground.

But while a steady performance on the European markets also suggested that the draft measures had soothed some jitters among investors, the continent’s leaders were unlikely to be so easily swayed.

German Chancellor Angela Merkel has said she expects a “sustainable” finance plan that respects the “basic rules” of the bailout programme, while British PM David Cameron moved Monday to draw up contingency plans for a Greek exit from the eurozone — dubbed a “Grexit”.

The government wants a bridging loan to buy time for negotiations without the austerity shackles.

A finance ministry source said such a deal could be reached to let both sides save face: “We call it a bridge. They can call it a technical extension.”

Greece is under pressure to win approval for a new deal as quickly as possible because the European portion of the EU-IMF bailout is due to expire at the end of the month.

An accord is not expected before a further meeting of eurozone financial ministers next Monday at the earliest.

Greece’s Finance Minister Yanis Varoufakis hailed the beginning of the talks as a watershed moment, saying “this is the first government that goes to the Eurogroup (of eurozone finance ministers) standing up, not bowed.”

The minister added, however: “I will do everything humanly possible to avoid a rift, but we will not refuse to consider (the option).”

Garry Jenkins, LNG Capital analyst, said the eurozone may believe that “behind closed doors the Greek government will be prepared to compromise”.

AFP

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