Saturday, January 31, 2015

Conflict between Greece and EU intensifies –

Conflict between Greece and EU intensifies –

Athens / Vienna – The conflict between the new Greek government under Alexis Tsipras and donors is getting worse. On Friday came from Athens more news about the termination of agreed measures. Besides the already known reinstatement of civil servants and the suspension of planned privatizations cooperation with the troika is now terminated. Greece’s new Finance Minister Yiannis Varoufakis, explained that they had promised the voters to end this collaboration with the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), because they reject the austerity measures. “Our first act as government can not be that we give up this position again, by requesting an extension of the program.”


Varoufakis spoke after a meeting with euro group chief Jeroen Dijsselbloem in Athens. However Varoufakis assured at the same time that Athens wants to implement reforms to make the Greek economy more competiti ve, and striving for a balanced budget. Only one will accept no deflation and unsustainable debt. What this means in detail, he left open. Dijsselbloem said he had warned the new government before unilateral action and asking them to adhere to the existing arrangements. You’ll decide before the end of February expiring utility, such should continue to be moved.


progress and commitments


The progress made so far in Greece may not be re-questioned said the Dutchman. Other European aid is conditional on Greece einhalte its obligations. The leading stock market slumped in Athens after the joint press conference both politicians further. The concern in the financial markets is growing that the highly indebted country is sliding in the absence of further aid money into bankruptcy. The cost of insurance against default of sovereign debt has exploded in the past week, the yield on government bonds rises above the threshold of ten per cent. Particularly at risk are the banks that depend on a drip of the ECB. About the Greek national central bank, more than 50 billion euros stuck in emergency funds in the banks. Exacerbated the situation by the withdrawal of funds since the election of Tsipras. Insiders say that from the expiry of the utility end of February and the emergency funds under the title ELA (European Liquidity Assistance) will be blocked. Then it c ame under the Greek banks probably a domino effect, analysts said.


The change of course is especially popular in Germany for detuning. Finance Minister Wolfgang Schaeuble expressed willingness to talk on Friday though, but Tsipras warned to move away from reform agreements. Blackmail were not Europeans, said his spokesman. He stressed that Greece’s partners in Europe and the IMF had gone with their aids together of € 240 billion to the limit of what is possible.


The German government reiterated its position that it holds nothing of a debt restructuring for Greece and a European Debt Conference, as it had been elsewhere mooted by politicians in Athens. Also Portuguese Prime Minister Pedro Passos Coelho, whose country also had to call on assistance from the IMF and the euro partners, opposed to any such Debt Conference. He would not support anything which would mean a waiver or debt rescheduling for countries at the expense of its part ners.


Tsipras want to travel next week to Cyprus, Rome and Paris to hold meetings with governments. A meeting with European Commission President Jean-Claude Juncker is planned a visit to Berlin is not. On the other hand, the German government has it not been invited. Angela Merkel, he would seem to meet at the EU summit on 12 February. (Red, Reuters, THE STANDARD, 31/1/2015)


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