Brussels, 05/02/2015 (Agence Europe) - On Thursday 5 February, the new Greek minister, Yanis Varoufakis, asked his German opposite number, Wolfgang Schäuble, for a “transitional programme until the end of May”, to carry out negotiations for a “new contract between Europe, Greece, the IMF and the ECB”. Greece wants to use this time to present proposals and a roadmap to its partners, Varoufakis explained.
These words came the day after the ECB's decision no longer to accept Greek bonds as guarantees for loans to banks of the country, thereby depriving them of a major channel of funding. This derogation was granted by the ECB in 2010, on the condition that Greece was under a programme. “It is up to the Eurogroup and to us politicians to decide on what kind of programme”, said Varoufakis, when asked about this point. He referred to a “contract in the long term to allow the ECB to do its job to provide stability” in the eurozone.
For his part, the Greek Prime Minister, Alexis Tsipras, told the national parliament the same day that Greece could not be blackmailed. The Commission, in the person of Pierre Moscovici, took note on Thursday of the ECB's decision, but also noted that the Greek banks continued to be financed. According to an article in the German daily newspaper Die Welt, the ECB is prepared to grant up to €60 billion in liquid assets to the Greek banks ('ELA').
“We have already agreed to disagree”, said Wolfgang Schäuble, following his meeting with Varoufakis. He said that he was “sceptical for some of the measures announced by Greece, some I do not believe go in the direction we wish to see”, he added. Following its first meeting of ministers, the Greek government announced a halt to privatisations, an increase in the minimum wage and the cancellation of civil servant redundancies. Schäuble told Varoufakis that he had to speak to the three institutions (of the 'troika') as provided for in the treaties, whilst Varoufakis said that he did not wish to see the ECB-Commission-IMF trio of experts back in Greece.
Growth of 2.5% predicted in 2015
It is to be expected that following the elections, a new government must be heard, “there can be changes in policies, if not why should we vote in the EU?”, said Moscovici, adding that the previous Greek governments had made commitments “in the name of the state itself”, and that they should stick to that. For Greece, the Commission predicts growth of 2.5% of GDP in 2015 and 3.6% in 2016, and debt of 170.2% this year and then 159.2% next, as long as reforms continue, “but that doesn't mean there is no room for manoeuvre for the government”, Moscovici said. Varoufakis explained that between 60% and 70% of the measures of the current programme were measures his government wanted to take, but that the programme did not do enough to tackle corruption and clientelism. He also called for a change of macro-economic philosophy, in order not to continue the mistake made of putting loans before economic reform.
Noting that the Greek government had already rejected out of hand a further extension of the eurozone aid plan, the Irish prime minister, Enda Kenny, said that there should be “conditions attached to the support”, stressing that if one measure is removed, it needs to be replaced with another one.
“A difficult question is how Greece can access market financing without a bailout programme”, Wolfgang Schäuble pointed out, adding that there was no agreement on this point at this stage. He stressed that Greece's problems were born in Greece, not in Europe, and certainly not in Germany.
With the fight against corruption and tax fraud his watchword, Varoufakis stressed that his country has suffered greatly from tax evasion through transfer prices, a problem Greece cannot tackle alone. The Greek minister refused the offer of his German counterpart to send him 500 tax consultants to help him to make his tax administration more efficient.
“We will make efforts to do everything in our power to avoid a default”, said Varoufakis, who firmly believes that with the help of his partners, it will be possible. Moscovici said that the Eurogroup of 16 February could make a decision. (EL)