Tsipras set for new bid to ease debt load
GREEK leftist leader Alexis Tsipras will return as prime minister determined to secure debt relief from the country’s creditors in his “first and most important battle” after scoring an unexpectedly clear poll victory.
But easing Greece’s debt burden is just one of many items on a dauntingly long “to do” list ranging from how to revive a crippled economy while implementing austerity policies to dealing with the wave of migrants landing on Greek shores.
In Sunday’s poll, voters gave Mr Tsipras and his Syriza party a second chance to tackle Greece’s problems, despite his U-turn when he ditched his anti-austerity platform to secure a new bail-out deal and avert ‘Grexit’— a Greek exit from the eurozone.
The extent of the win means that Syriza will be able to govern with only a single ally, the Independent Greeks. The small right-wing party was the junior partner in the Tsipras coalition that governed for seven turbulent months until he resigned last month, forcing the poll.
With Greek society fractured by years of austerity, Mr Tsipras wants to build a broader consensus as he tries to steer his country through the tough reforms demanded by the euro zone in the bail-out agreement — the country’s third.
A presidency source said Mr Tsipras was due to be sworn in late yesterday. Initially, negotiating debt relief would dominate his agenda, a senior Syriza source said.
“We will continue negotiations in the coming period, with the debt issue being the first and most important battle,” the party source said.
“We will ask all political forces to support our efforts.”
Mr Tsipras — along with most Greek political leaders and many international economists — argues that the country cannot recover from years of crisis without the easing of its huge debt burden.
In his victory speech to cheering crowds in Athens late on Sunday, he promised a new phase of stability in a country that has held five general elections in six years, but did not mention the $97bn bail out.
However, Syriza campaigned on a pledge to implement the programme, which includes more tax rises and pension cuts, while promising to introduce measures to protect vulnerable groups.
With the first review of the controversial bail-out programme due next month, Mr Tsipras must work fast to oversee a recapitalisation of the country’s banks — closed for three weeks at the height of the crisis and still subject to capital controls — while trying to stave off a recession and tackling the migrant crisis.
His first international summit is tomorrow in Brussels to discuss the hundreds of thousands of refugees and migrants pouring into Europe, many of them via Greek islands that border Turkey.
In a reminder of that crisis, 13 migrants died in Turkish waters on Sunday when a boat carrying 46 people en route to Greece collided with a cargo vessel and capsized, a Turkish coast guard source said.
In a financial market that looked to have factored in a Syriza win, Greek shares lost ground yesterday and government bond yields edged higher — mirroring a cautious reaction elsewhere to Mr Tsipras’s second incarnation as leader of the economically troubled nation.
European Council president Donald Tusk said many of the biggest problems facing the European Union were the same as Greece’s — the refugee crisis and creating economic growth and jobs.
“I trust that Greece, with your new government, will contribute con- structively in seeking solutions to all those challenges,” he said in a letter to the leftist leader.
Mr Tsipras plans to form a council for European policy, including representatives of parties other than Syriza and the Independent Greeks and that would advise the finance minister, the Syriza source said.
Centre-left daily newspaper Ethnos yesterday tipped Euclid Tsakalotos, the former finance minister who brokered terms of the bail-out accord last month, to be re-appointed.
Citigroup economist Giada Giani said the risk remained that Greece — having flirted with Grexit during fraught bail-out negotiations in the spring and early summer — might still leave the eurozone.
JP Morgan analyst Malcolm Barr said Mr Tsipras was likely to feel emboldened by the result, which “provides a platform upon which Syriza will continue to challenge significant parts of the programme”.
Some form of restructuring of Greece’s eurozone debt should be in place by the end of March, he wrote in a note.
Some European governments, particularly Germany, are opposed to writing off part of Greece’s debt — a so-called haircut — but are not averse to stretching out the country’s repayment schedule.
Ralph Brinkhaus, a senior parliamentary ally of German Chancellor Angela Merkel, urged Mr Tsipras to stick to the reform agenda and implement the bail-out measures.
Eurozone officials told Reuters last week that governments were ready to cap Greece’s annual debtservicing costs at 15% of its economic output over the long term.
That would mean the nominal payment would be lower if the Greek economy struggled, but higher if it was more robust, the eurozone officials said.
I trust that Greece, with your new government, will contribute constructively in seeking solutions