A day after Greece appeared on a collision course with its creditors,
new radical left Prime Minister Alexis Tsipras has tamped down the
rhetoric by vowing to pay off debts and not act unilaterally.
Finance Minister Yanis Varoufakis, who had a tense meeting with Eurogroup leader Jeroen Dijsselbloem in Athens on Saturday, has brought forward a trip to Paris, London and Rome to meet his counterparts.
Tsipras says he never intended to act unilaterally and expressed his certainty that Greece and the creditors will reach an agreement.
Eurogroup President Jeroen Dijsselbloem, left, had a tense meeting over
the weekend with Greece's Finance Minister, Yanis Varoufakis. Photo / AP
He also pledged to pay back Greece's debt to the European Central Bank and the International Monetary Fund, which, along with the European Commission, form the "troika" of Greece's creditors.
German Finance Minister Wolfgang Schaeuble, however, had warned Athens against strong-arm negotiating tactics in its effort to win debt relief. Rules need to be kept, and trust and reliability were the basis for further solidarity, the dpa news agency reported him saying.
"There's no arguing with us about this, and what's more we are difficult to blackmail," Schaeuble was quoted saying in Berlin.
"We are prepared to offer all cooperation and solidarity," he said, but only if Greece abides by its agreements, under which it received 240 billion ($373.5 billion) in rescue loans. Without the loans from its fellow eurozone countries and the International Monetary Fund, Greece would struggle to service its debts and avoid bankruptcy.
"The discussion about a debt cut or a debt conference is divorced from reality," Martin Jaeger, a German finance ministry spokesman, said in Berlin earlier.
Greece's Parliamentary Budget Office, which makes quarterly recommendations to lawmakers, warned that the country faces default unless a deal with creditors is reached soon. Greece's next government debt obligations are due in March.
Shares on the Athens Stock Exchange closed down 1.6 per cent on Saturday, capping total losses of 13 per cent for the week, while the interest rate on three-year bonds - a gauge of short-term risk of default - rocketed to 19.3 per cent.
In Athens, Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, met with top officials to sound out the new Government.
Dijsselbloem acknowledged Greeks have gone through much in recent years to reform their economy, and warned that rash actions by the Government would not help.
"Taking unilateral steps or ignoring previous agreements is not the way forward," he told reporters after his meeting with Varoufakis.
Tsipras' government, voted in last Monday, has already said it will cancel several planned privatisation projects and considerably scale down planned budget surpluses requiredto pay down Greece's significant debt.
Tsipras will launch a small tour of other eurozone countries next week, flying to Cyprus, Italy and France.
Greece's bailout, which began in May 2010, runs out on February 28 after an initial two-month extension was granted for completion of frozen negotiations.
Greece still has to receive the last 7.2 billion batch of its loans from the eurozone.
Dijsselbloem said the eurozone countries would decide before February 28 what to do about financing Greece. He also rejected Greece's request to hold a conference to discuss restructuring its debt, saying the eurozone's monthly finance meetings would serve the purpose.
Credit ratings agency Fitch said at the weekend that, in the short term, both sides have a "strong incentive" to reach an agreement to make sure Greece gets the rescue money from the bailout programmes. It warned, however, that drawn-out negotiations pose a "high risk" to the country's fragile economy.
Merkel rules out relief
German Chancellor Angela Merkel has rejected the prospect of debt relief for Athens, adding to tensions between the radical new Greek Government and its international creditors.
"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel said in an interview with the Hamburger Abendblatt newspaper.
"I do not envisage fresh debt cancellation," she said.
The new Greek Government has already begun to roll back years of austerity measures demanded by the European Union and the International Monetary Fund in return for a bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the 240 billion ($373 billion) debt.
Finance Minister Yanis Varoufakis, who had a tense meeting with Eurogroup leader Jeroen Dijsselbloem in Athens on Saturday, has brought forward a trip to Paris, London and Rome to meet his counterparts.
Tsipras says he never intended to act unilaterally and expressed his certainty that Greece and the creditors will reach an agreement.
He also pledged to pay back Greece's debt to the European Central Bank and the International Monetary Fund, which, along with the European Commission, form the "troika" of Greece's creditors.
German Finance Minister Wolfgang Schaeuble, however, had warned Athens against strong-arm negotiating tactics in its effort to win debt relief. Rules need to be kept, and trust and reliability were the basis for further solidarity, the dpa news agency reported him saying.
"We are prepared to offer all cooperation and solidarity," he said, but only if Greece abides by its agreements, under which it received 240 billion ($373.5 billion) in rescue loans. Without the loans from its fellow eurozone countries and the International Monetary Fund, Greece would struggle to service its debts and avoid bankruptcy.
"The discussion about a debt cut or a debt conference is divorced from reality," Martin Jaeger, a German finance ministry spokesman, said in Berlin earlier.
Greece's Parliamentary Budget Office, which makes quarterly recommendations to lawmakers, warned that the country faces default unless a deal with creditors is reached soon. Greece's next government debt obligations are due in March.
Shares on the Athens Stock Exchange closed down 1.6 per cent on Saturday, capping total losses of 13 per cent for the week, while the interest rate on three-year bonds - a gauge of short-term risk of default - rocketed to 19.3 per cent.
In Athens, Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, met with top officials to sound out the new Government.
Dijsselbloem acknowledged Greeks have gone through much in recent years to reform their economy, and warned that rash actions by the Government would not help.
"Taking unilateral steps or ignoring previous agreements is not the way forward," he told reporters after his meeting with Varoufakis.
Tsipras' government, voted in last Monday, has already said it will cancel several planned privatisation projects and considerably scale down planned budget surpluses requiredto pay down Greece's significant debt.
Tsipras will launch a small tour of other eurozone countries next week, flying to Cyprus, Italy and France.
Greece's bailout, which began in May 2010, runs out on February 28 after an initial two-month extension was granted for completion of frozen negotiations.
Greece still has to receive the last 7.2 billion batch of its loans from the eurozone.
Dijsselbloem said the eurozone countries would decide before February 28 what to do about financing Greece. He also rejected Greece's request to hold a conference to discuss restructuring its debt, saying the eurozone's monthly finance meetings would serve the purpose.
Credit ratings agency Fitch said at the weekend that, in the short term, both sides have a "strong incentive" to reach an agreement to make sure Greece gets the rescue money from the bailout programmes. It warned, however, that drawn-out negotiations pose a "high risk" to the country's fragile economy.
Merkel rules out relief
German Chancellor Angela Merkel has rejected the prospect of debt relief for Athens, adding to tensions between the radical new Greek Government and its international creditors.
"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel said in an interview with the Hamburger Abendblatt newspaper.
"I do not envisage fresh debt cancellation," she said.
The new Greek Government has already begun to roll back years of austerity measures demanded by the European Union and the International Monetary Fund in return for a bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the 240 billion ($373 billion) debt.
