Feb 02, 2015

    Greece seeks allies in renegotiating bailout


    GREECE'S anti-austerity government was to begin a European charm offensive yesterday aimed at building consensus on renegotiating its 240 billion euro (S$367 billion) bailout, even as Germany insisted it would not support any debt relief.

    Just hours before Finance Minister Yanis Varoufakis headed to Paris to seek support for a renegotiation of the bailout, Prime Minister Alexis Tsipras said he believed a deal could be reached with the Europrean Union (EU) and International Monetary Fund (IMF).

    "No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt," Mr Tsipras said in a statement issued to Bloomberg News.

    Mr Varoufakis had talks scheduled with French Finance Minister Michel Sapin and Economy Minister Emmanuel Macron yesterday, before heading to London and Rome.

    Mr Sapin has already said the EU should be open to discussions with the new Greek government on restructuring its debt or extending the bailout terms.

    In its first meeting with creditors since it took office a week ago, the Greek government on Friday clashed with Jeroen Dijsselbloem, the head of the euro-zone finance ministers, over its plans to rethink its rescue package and halve Greece's debt.

    Mr Tsipras, who will visit Italian Prime Minister Matteo Renzi and French President Francois Hollande, said his plans did not mean Greece would renege on its commitments to the EU and IMF.

    "On the contrary, it means that we need time to breathe and create our own medium-term recovery programme," he said.

    This includes aiming to balance the budget - excluding debt repayments - and clamping down on tax evasion, corruption and policies which favour only a wealthy few, Mr Tsipras said.

    Neither he nor Mr Varoufakis intend to visit Germany, which has shouldered the bulk of Greece's loans and strongly objects to Athens' stated plans.

    German Chancellor Angela Merkel on Saturday ruled out fresh debt relief, telling the Hamburger Abendblatt daily: "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt. I do not envisage fresh debt cancellation."

    Despite a restructuring in 2012, Greece has a debt pile of more than 315 billion euros, upwards of 175 per cent of gross domestic product - an EU record.