Greek premier de­fi­ant on debt talks

Ger­man-led cred­i­tors re­ject re­struc­tur­ing de­mands un­til the coun­try prom­ises more aus­ter­ity moves.

Los Angeles Times - - THE WORLD - By Steven Zeitchik steve.zeitchik@la­

BER­LIN — Hav­ing ac­knowl­edged that the Syriza­led Greek govern­ment couldn’t reach an im­me­di­ate deal with Euro­pean cred­i­tors, Prime Min­is­ter Alexis Tsipras took to the air­waves to sound a de­fi­ant note on the failed talks.

In a na­tion­ally tele­vised ad­dress to the Greek Par­lia­ment on Fri­day evening, Tsipras re­buffed the Euro­pean Com­mis­sion and the Ger­man-led cred­i­tors who hold much of Greece’s debt.

“The govern­ment is not go­ing to give in to ab­surd pro­pos­als,” he told law­mak­ers in Athens. This is “a bad ne­go­ti­at­ing trick.”

He also warned against those who would “hu­mil­i­ate” Greece, a ref­er­ence to what many in Athens per­ceive as scold­ing treat­ment from the in­sti­tu­tions, and par­tic­u­larly Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble.

Greece is seek­ing a debt re­struc­tur­ing that would al­le­vi­ate the bur­den of its mas­sive fi­nan­cial obli­ga­tions and re­lease about $8 bil­lion in pre­vi­ously agreed-upon bailout funds, in turn pre­vent­ing a de­fault and po­ten­tial exit from the euro cur­rency. The Ger­man-led cred­i­tors are re­fus­ing to meet Greece’s de­mands un­til the coun­try makes prom­ises of more aus­ter­ity moves and la­bor mod­i­fi­ca­tions.

Tsipras’ Syriza, how­ever, was elected in Jan­uary on a strong anti-aus­ter­ity plat­form.

The bat­tle has come to a head in the last few weeks be­cause of Greece’s June 5 dead­line for a $325-mil­lion debt pay­ment to the In­ter­na­tional Mone­tary Fund, a pay­ment Greece had said it wouldn’t make.

Af­ter sev­eral days last week when it seemed like a deal be­tween Greece and the lend­ing in­sti­tu­tions was at least a pos­si­bil­ity, the talks stalled Thurs­day. Tsipras’ govern­ment for­mally re­quested, and was granted, an al­ter­nate pay­ment sched­ule that would give Greece sev­eral weeks to make the $325-mil­lion pay­ment.

The re­quest to the IMF, though rare, was a fairly straight­for­ward way for Greece to buy more time. But it did lit­tle to al­le­vi­ate the un­der­ly­ing is­sue, and will now ob­li­gate Greece to write a check to the IMF in ex­cess of $1.7 bil­lion in to­tal debt pay­ments by the end of the month, also the time when the cur­rent bailout agree­ment ex­pires.

Tsipras’ pro­nounce­ments on Greek tele­vi­sion were largely waved off by Ger­man com­men­ta­tors as more rhetoric from a leader who has not been shy about such state­ments.

Still, they un­der­scored Tsipras’ tight rope walk.

The Greek leader has long been caught be­tween two flanks of his party: the more main­stream group that fa­vors stay­ing in the Eu­ro­zone, and the so-called Left Plat­form, the roughly 30% that is more open to an exit. Tsipras’ sharp re­marks Fri­day were seen as an at­tempt to pla­cate that wing, which has ex­pressed con­cern that he and Fi­nance Min­is­ter Ya­nis Varo­ufakis will ca­pit­u­late too eas­ily to Ger­man de­mands.

Tsipras also had a phone con­ver­sa­tion Fri­day with Rus­sian Pres­i­dent Vladimir Putin con­cern­ing po­ten­tial en­ergy col­lab­o­ra­tions, a ges­ture that was also seen as ap­peal­ing to Syriza’s rad­i­cal flank, which fa­vors a shift away from Europe.

Still, Tsipras made sure to­move only so far in that di­rec­tion Fri­day. In his speech to Par­lia­ment, he also called for a “con­clu­sive so­lu­tion” and warned of an eco­nomic dis­as­ter that would be­come a ”self-ful­fill­ing prophecy” if exit talks heat up.

Mar­kets are watch­ing the talks closely, with the prospect of a so-called Grexit reignit­ing fear of global con­ta­gion that be­gan at the start of the debt cri­sis more than five years ago.

The na­tion of 11 mil­lion has been mired in a fi­nan­cial cri­sis that the on­go­ing debt prob­lems have only wors­ened.

Tsipras has sought to walk a line be­tween ap­peal­ing to Greeks’ na­tional pride in re­sist­ing a deal and not mak­ing it seem as if Ger­man ne­go­ti­a­tions and a larger fi­nan­cial limbo would be­come a per­ma­nent con­di­tion.

Whether Greeks have felt re­as­sured is an open ques­tion.

“There’s a feel­ing among the peo­ple of Greece that this has been stag­nant for a long time and needs to come to a res­o­lu­tion soon,” said Ro­man Gero­mi­dos, an ex­pert on mod­ern Greek af­fairs at Bournemouth Univer­sity in Eng­land.

“One way or another, there has to be some con­clu­sion, be­cause they feel they can’t con­tinue with the un­cer­tainty.”

Thanas­sis Stavrakis As­so­ci­ated Press

GRAF­FITI in Athens de­picts a zero euro coin. Greece is seek­ing a debt re­struc­tur­ing that would al­le­vi­ate the bur­den of its­mas­sive fi­nan­cial obli­ga­tions and re­lease about $8 bil­lion in pre­vi­ously agreed-upon bailout funds.

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