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Financial Mirror (Cyprus) - - FRONT PAGE -

The new Greek gov­ern­ment plans to end a stand­off with its cred­i­tors by swap­ping its out­stand­ing debt for growth-linked bonds, Fi­nance Min­is­ter Ya­nis Varo­ufakis said in Lon­don on Mon­day dur­ing a visit to re­as­sure pri­vate in­vestors that he was not seek­ing a show­down with Brussels over a new debt agree­ment. The pro­pos­als, which in­clude a pledge to re­form the econ­omy, con­trast sharply with calls last week to ditch the tough aus­ter­ity mea­sures im­posed un­der the ex­ist­ing bailout.

Varo­ufakis called his plan a “menu of debt swaps” that meant Athens would no longer call for a write-off of Greece’s 315 bln eu­ros of for­eign debt, the Fi­nan­cial Times re­ported.

The menu would in­clude two types of new bonds: one in­dexed to nom­i­nal eco­nomic growth, and one he called “per­pet­ual bonds” to re­place ECB-owned Greek bonds.

“We are putting to­gether a com­bi­na­tion of a pri­mary bud­get sur­plus, and a re­form agenda,” Varo­ufakis told the news­pa­per.

“I’ll say, ‘Help us to re­form our coun­try and give us some fis­cal space to do this, oth­er­wise we shall con­tinue to suf­fo­cate and be­come a de­formed rather than a re­formed Greece’.”

It was not clear whether the debt swap pro­pos­als would be ac­cepted by Euro­pean pay­mas­ter Ger­many, which op­poses soft­en­ing the terms, with its Fi­nance Min­is­ter Wolf­gang Schauble say­ing ear­lier that Ber­lin would not ac­cept any uni­lat­eral changes to Greece’s debt pro­gramme.

Athens also planned to tar­get wealthy tax­e­vaders and post pri­mary bud­get sur­pluses of 1 to 1.5% of gross do­mes­tic prod­uct, Varo­ufakis told the FT, even if it meant his party, Syriza, could not ful­fill all the spend­ing prom­ises on which it was elected.

In a state­ment re­leased by the Fi­nance Min­istry in Athens on Tues­day, Varo­ufakis said the gov­ern­ment’s aim was to pull the coun­try out of “debt serf­dom.”

Varo­ufakis, an out­spo­ken econ­o­mist who has likened EU aus­ter­ity poli­cies to “wa­ter­board­ing”, be­gan his Euro­pean tour over the week­end in Paris, where the cen­treleft gov­ern­ment is thought to be more sym­pa­thetic than oth­ers to the case for re­lax­ing lend­ing con­di­tions.

He then moved to Lon­don


meet in­vestors whose con­fi­dence is cru­cial, say­ing he was not in “a kind of Wild West show­down” with the EU, but aimed to strike a mu­tu­ally ben­e­fi­cial deal to min­imise the cost of the cri­sis for the av­er­age Euro­pean.

Varo­ufakis met about 100 banks and fi­nan­cial in­sti­tu­tions in Lon­don. An or­gan­iser said one of the meet­ings had to be moved from an up­mar­ket Lon­don mem­bers’ club, be­cause Varo­ufakis wouldn’t wear a tie.

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