Change to Greek bailout talks team fu­els mar­ket hope

The China Post - - COMMENTARY - BY ELENA BE­CA­TOROS

Greece reshuf­fled its bailout ne­go­ti­at­ing team on Mon­day fol­low­ing fierce crit­i­cism of its fi­nance min­is­ter, meet­ing with mar­ket ap­plause as in­vestors hoped it will fa­cil­i­tate a deal to save the coun­try from bank­ruptcy.

A Greek of­fi­cial in­sisted Ya­nis Varo­ufakis, who has come un­der fire from his Euro­pean peers for drag­ging his feet in the bailout talks, con­tin­ued to en­joy the gov­ern­ment’s sup­port. He will con­tinue to lead the ne­go­ti­a­tions, which have been de­layed for three months.

But Eu­clid Tsakalo­tos, who is min­is­ter of in­ter­na­tional fi­nan­cial re­la­tions and part of the for­eign min­istry, will han­dle the co­or­di­na­tion within Varo­ufakis’ ne­go­ti­at­ing team.

Tsakalo­tos is close to Prime Min­is­ter Alexis Tsipras and has of­ten ac­com­pa­nied Varo­ufakis on trips to Euro­pean cap­i­tals dur­ing the ne­go­ti­a­tions.

A sep­a­rate team will be cre­ated to sup­port tech­ni­cal talks in Athens, while the fi­nance min­istry’s gen­eral sec­re­tary for fis­cal plan­ning was tasked with designing a plan for eco­nomic growth. The of­fi­cial spoke on con­di­tion of anonymity in line with gov­ern­ment reg­u­la­tions

The moves sug­gest the Greek gov­ern­ment is in­tent on reach­ing a deal and the main Greek stock in­dex ral­lied on the news, closing up 4.4 per­cent. Yields on the coun­try’s two-year bonds — a gauge of mar­ket fears that the coun­try might de­fault — fell al­most 2 per­cent­age points to about 23 per­cent.

It is un­clear how far the reshuf­fling will curb Varo­ufakis’ in­flu­ence in the ne­go­ti­a­tions, and if so, whether that will change the tenor of the talks.

Varo­ufakis was re­buked by Greece’s cred­i­tors most re­cently at a fi­nance min­is­ters’ meet­ing in Riga, Latvia, where he failed to come up with a list of eco­nomic re­forms cred­i­tors want in ex­change for new loans.

In Athens, gov­ern­ment of­fi­cials say Varo­ufakis has been un­nec­es­sar­ily vil­i­fied and has been sub­ject to a smear cam­paign by the in­ter­na­tional me­dia.

‘I wel­come their ha­tred.’

On Sun­day, Varo­ufakis took to Twit­ter with a Franklin D. Roo­sevelt quote. “FDR, 1936: ‘They are unan­i­mous in their hate for me; and I wel­come their ha­tred.’ A quo­ta­tion close to my heard (& re­al­ity) th­ese days,” he tweeted.

Un­der a four-month bailout ex­ten­sion, Greece had un­til April 30 to come up with ac­cept­able re­forms so cred­i­tors can un­lock the fi­nal 7.2 bil­lion euro (US$7.8 bil­lion) loan in­stall­ment. But a deal still seems far off.

Be­yond the crit­i­cism of Varo­ufakis, Euro­pean of­fi­cials de­plore the new gov­ern­ment’s in­tran­si­gence and lack of progress in propos­ing ac­cept­able re­forms to un­lock bailout funds that Greece des­per­ately needs to avoid de­fault and a po­ten­tial exit from the euro.

Tsipras won Jan. 25 elec­tions on prom­ises to re­peal deeply re­sented aus­ter­ity mea­sures, in­clud­ing pen­sion cuts and tax in­creases, which came as a con­di­tion for Greece’s two in­ter­na­tional bailouts worth a to­tal of 240 bil­lion eu­ros from other eu­ro­zone coun­tries and the In­ter­na­tional Mon­e­tary Fund.

“Our in­ten­tion is to keep Greece in the eu­ro­zone,” Ger­man Fi­nance Min­istry spokesman Martin Jaeger said in Ber­lin on Mon­day.

“But I would like to point out again that the ball is def­i­nitely in the Greeks’ court. We are wait­ing for pro­pos­als. We have been wait­ing for weeks. That is some­what frus­trat­ing, but we are pa­tient.”

De­spite Euro­pean crit­i­cism, Varo­ufakis con­tin­ues to en­joy strong pop­u­lar­ity at home. A week­end poll showed 55 per­cent of re­spon­dents had a pos­i­tive view of his ac­tions as min­is­ter, ver­sus 36 per­cent with a neg­a­tive view.

But the poll, car­ried out by ALCO for the Proto Thema Sun­day news­pa­per, showed fall­ing rat­ings for the gov­ern­ment. Fifty-two per­cent were un­sat­is­fied with its per­for­mance, com­pared to 39 per­cent who were. If cred­i­tors don’t ac­cept Greece’s pro­pos­als, 50 per­cent want the gov­ern­ment to com­pro­mise and 36 per­cent want a rup­ture.

In a Fe­bru­ary poll by Metron Anal­y­sis, 68 per­cent of re­spon­dents had said they were sat­is­fied with the gov­ern­ment’s han­dling of the ne­go­ti­a­tions, com­pared to 23 per­cent who ob­jected.

A sep­a­rate Sun­day poll, by Kapa Re­search for To Vima news­pa­per, found 71.9 per­cent of re­spon­dents be­lieve the best out­come is a com­pro­mise with cred­i­tors.

De­spite the fall, Syriza still en­joys a com­fort­able lead over its main ri­val, the con­ser­va­tive New Democ­racy party — 33.3 per­cent of vot­ers fa­vor it against 20.2 per­cent.

Both polls had a mar­gin of er­ror of about 3.1 per­cent.

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