Change to Greek bailout talks team fuels market hope
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.