Brussels, 28/01/2015 (Agence Europe) - The European Commission expects Greece to honour the commitments it has made to the European citizens, its Vice-President, Jyrki Katainen of Finland, stated on 28 January. Katainen, who was speaking following a meeting of the College which discussed the Greek dossier, explained that the Commission's position on Greece's situation was unanimous.
“We have to cooperate in a similar way as with the previous governments”, said Katainen, adding that the situation remained the same and that there were no grounds to expect “many changes on our part”. He went on to state that the new government has been invited to the Commission, but no date has yet been set. The Commission is ready to talk, he stressed, adding that it does not change its policies according to elections. “The commitments haven't changed and time is running out, so we have to get a clear picture and get information from the government that they will fulfil what they have promised to do”, said Katainen, adding that it was not a matter of the EU institutions, but of the EU citizens.
The position expressed from Berlin is very close to that of the Commission. Quoted by AFP, the Minister for the Economy, Sigmar Gabriel, explained that the aim was to keep Greece in the eurozone, “but the principle of justice towards our population, the people of Germany and Europe (…) who have shown solidarity with the Greeks through the aid granted since 2010” must be respected.
Except that in Athens, it has not taken long for the commitments previously taken by Greece to be called into question. Following the first meeting of the ministerial cabinet, of just ten ministers (none of them women), an announcement was made that a halt would be called to the privatisation of some of the assets of the public electricity company Public Power Company ('PCC') and that of the port of Piraeus. Personnel made redundant under Antonis Samaras will be given their jobs back, the government also announced, and the minimum wage will be increased. Quoted by the Greek press, the new Prime Minister also said that he wanted to maintain a balanced budget, but would not seek to achieve “unrealistic surpluses” to pay for the servicing of the debt. The new finance minister, Yanis Varoufakis, however, said that there would be no explosion in public expenditure. He also called for a 'pan- European New Deal'. It is worth noting that Varoufakis will be working alongside Deputy Prime Minister Ioannis Dragasakis, who will supervise the negotiations with the creditors, and George Stathakis, minister for the economy, infrastructure, the merchant navy and tourism. Alexis Tsipras, the prime minister, has pledged to avoid a “mutually destructive clash” with the eurozone, but will not continue a policy of subjection. He hopes to negotiate a “viable, fair, mutually beneficial solution so that the country exits the vicious circle of excessive debt and recession”.
Following the government's announcements, the general index of the Athens Stock Exchange fell by 8% and the country's ten-year borrowing rate rose back above the symbolic threshold of 10%. “The Greek government, the Eurogroup and the EU institutions must behave in such a way as to increase stability instead of increasing uncertainty”, Jyrki Katainen stressed. “Nobody wants to destroy the positive elements” seen in Athens, which is why “we need to continue on a path of viability”, he said.
On the debt, it is worth noting an interesting contribution from Reza Moghadam, a former IMF official who took part in the negotiations within the 'troika' between 2010 and 2014. Amongst other things, he explained that the current plan of a primary surplus of 4.5% in 2016 and beyond would threaten social cohesion and wreck any prospect of economic recovery. He calls for this objective to be halved, and for the debt to be halved in exchange for reforms. Speaking on France Info on Wednesday, the Commissioner for Economic and Financial Affairs, Pierre Moscovici, explained that there was no unanimity within the Eurogroup to reduce the debt. Whilst Syriza is calling for radical change, Moscovici stresses his view that “in any hypothetical situation, we have to move to another phase” with Greece. The President of the Eurogroup, Jeroen Dijsselboem, will travel to Athens on Friday, following a visit the day before by the President of the European Parliament, Martin Schulz. (EL)