Brussels, 26/01/2015 (Agence Europe) - On Monday 26 January, the Europeans said that they were prepared to work with Alexis Tsipras, the leader of the extreme left-wing party, Syriza, which won the general elections held in Greece the day before, whilst reminding the future Greek authorities of the commitments taken by previous governments (see EUROPE 11239).
Congratulating Syriza on its “clear victory”, the President of the Eurogroup, Jeroen Dijsselbloem, said that he hoped to be in a position to start work with the future Greek government very soon to tackle the economic and budgetary “challenges” which Greece continues to face. He said that the creditors of Athens and the future government - which was not represented at Monday's Eurogroup meeting - have a common objective: “strengthening the economy” of the country. “Belonging to the Eurozone means you comply with all that has been agreed with each other”, he added.
On the question of the viability of the Greek debt, which stands at more than 175% of GDP (see EUROPE 11237), Dijsselbloem stressed that the Europeans have “already done a lot to lift the debt burden for Greece, in terms of interest rates and maturity”. This question will be discussed once again “after the completion of the fifth review” to be carried out by the 'troika' (European Commission, ECB and IMF), he added. When asked about the possibility that part of the debt would be quite simply written off, he said that there was no support for that within the Eurogroup.
The President of the European Commission, Jean-Claude Juncker, phlegmatically said that he was “not excessively nervous” at all matters relating to Greece. The Commissioner for Economic Affairs, Pierre Moscovici, said that the Greeks and all Europeans want to see the country bounce back and stay on its own two feet, create jobs and growth and pay off its debts, because “that is vital”. The discussions will not focus on the ends, but the means to get there, he reasoned, expressing his hopes that the Eurogroup would be able to send out a signal to authorise an early resumption of talks with Greece “in full respect of the commitments made”. His colleague for the euro, Valdis Dombrovskis, said similar: “the basis of negotiation is very clear that all sides must stick to their commitments”, adding: “we see that the Greek economy is at a turning point, is back at economic growth, unemployment is starting to decline, there was a primary surplus (not including the servicing of the debt: Ed) last year and is expected this year. It is important to build on these positive developments so that Greece can recover”.
Germany reminded Greece of its obligations. “There are rules, there are agreements. Whoever understands these things knows the numbers, knows the situation”, said the German Finance Minister, Wolfgang Schäuble. Steffen Steibert, spokesperson to the German Chancellor, Angela Merkel, said that the terms accepted by Greece had not been taken off the table after the election day.
Striking a more conciliatory note, the French Finance Minister, Michel Sapin, observed that the party Syriza had “demonstrated a sense of responsibility” during the election campaigns, as “at no point did they talk about coming out of the euro”. He approves of the “administrative or fiscal reforms” planned by Syriza. “All subjects must be discussed, the rules, the commitments, the reforms, the path. The path is not simply a question of debt. It's about all the elements which make a country like Greece (…) rediscover its desire to be in today's Europe”, he concluded.
In December 2014, the second bailout plan for Greece was extended until the end of February. Of the €130 billion in total aid pledged, a tranche of €3.6 billion has still to be paid. The possibility of extending the aid plan was on the agenda of Monday's Eurogroup meeting. Some people are talking about an extension of several months, so as to buy time for negotiations which are expected to be tough.
In the meantime, general elections are to be held in Finland this spring. On Monday, the Finnish Prime Minister, Alex Stubb, stressed once again that his country was not prepared to agree to writing off any part of the Greek debt, but would be inclined to discuss an extension of the bailout plan or maturities of the loans granted, as long as Greece continues with its economic reforms.
Alexis Tsipras sworn in. On Monday, Alexis Tsipras was sworn in as the new Greek Prime Minister, the day after Syriza's election victory. In the morning, he concluded a government agreement with the Independent Greeks movement (sovereignist right), which has 13 seats in the new Parliament. Syriza narrowly missed out on an absolute majority, with 149 MPs out of a total of 300 at the Vouli. Tsipras is to attend the next European summit, in Brussels on Thursday 12 February.
In 2015, Greece must pay back more than €20 billion to its creditors, including €3.5 billion in March. If it were to secure a rescheduling of its debt repayment, the future government would save enough to partially fund the recovery measures it promised its voters. Amongst other things, a helping hand to low-earners and pensioners has been promised, together with an increase in the annual taxable income threshold for individuals and social assistance to the poorest members of society. Syriza also hopes to fight the oligarchical nature of certain sectors of activity, such as the media.
Additionally, presidential elections will be held in Greece in the spring. The names doing the rounds include the former Prime Minister, Kostas Karamanlis, and the current Commissioner for Migration, Dimitris Avramopoulos. (MB with MD and SP)