Government to present plan next week, it says has no cash problem – Opinion poll shows strong public support for government confrontation with creditors.
Athens.- A cabinet meeting chaired by Prime Minister Alexis Tsipras on Saturday concluded a meeting that put the final touches to the policy statements that was expected be unveiled in Parliament on Sunday, first day of the deliberations for the government to get a majority vote. A meeting of SYRIZA’s Parliamentary group has followed.
Government sources said that these will be divided into two main parts: one will deal with the first five months of the year, until the end of June, and the bridging programme that Greece has requested form its lenders, while the second will concern the 3.5 years following that.
“The government speaks the language of truth, whether it is speaking in Parliament or at the Eurogroup,” the same sources commented.
The new left-wing government in Athens has rejected the austerity that was forced upon the country by an EU/International Monetary Fund bailout and instead says it wants a “bridge agreement” until it has negotiated a new deal.
“We will present a comprehensive proposal on Wednesday,” Finance Minister Yanis Varoufakis said, referring to a meeting of euro zone finance ministers in Brussels on that day.
Varoufakis was attending a cabinet meeting called to prepare the government’s overall policy programme, which Prime Minister Alexis Tsipras will present to parliament on Sunday.
On Friday, Jeroen Dijsselbloem, who chairs the Eurogroup of euro zone finance ministers, told Reuters that Greece had to apply for an extension of its reform-for-loans plan by Feb. 16 to ensure the euro zone keeps backing it financially.
This is essentially an extension of the current bailout, something Greece has said it does not want and will not accept. It is due a 7.2 billion euro trance from the EU/IMF bailout, which it says it does not want because of the austerity strings attached.
Instead, Athens wants authority from the euro zone to issue more short-term debt to tide it over until a new deal is agreed, and to receive already-agreed profits that the European Central Bank and other central banks have gained from holding Greek bonds.
Prime Minister Alexis Tsipras is to travel to Vienna on Monday for a meeting with Austrian Chancellor Werner Faymann. The meeting has been scheduled at 11:00 local time and was arranged at the invitation of the Austrian chancellor, ahead of the EU Summit on February 12 where European leaders will meet to discuss the new agreement being proposed by the Greek government.
The prime minister is to return to Greece the same day.
It is yet unclear what the position of the Greek government is and remains an open question what will happen after the current bailout programme expires at the end of February, a spokesman for the German finance minister said on Friday.
“It is completely open what will happen after the end of the current bailout program,” Martin Jager said, adding that Greece has to present specific proposals to the extraordinary Eurogroup meeting on February 11.
“Until now, it is unclear what the actual position of the Greek government is,” the spokesman noted and added that the current programme has to be completed first and that he’s not aware of a bridging loan.
Jager also warned Greece not to roll back reforms which have already been completed. “If this is the case, that existing elements are being cancelled, then this is not a good sign.”
Greece now has a government that is prepared to negotiate with dignity, not on its knees, Independent Greeks (ANEL) leader and Defence Minister Panos Kammenos said in statements on the private television station SKAI on Saturday.
The head of the junior member of Greece’s coalition government, when asked to comment on the tough stance shown by Germany’s Chancellor Angela Merkel to Greek requests, noted that Greece’s EU partners “are no longer talking to either Mr. Samaras or Mr. Venizelos,” referring to the leaders of the previous ruling coalition.
“The government was given a mandate by the Greek people to proceed with a change of policy and any change of policy will be in favour of the citizens that have suffered these five years from the ‘mistaken policy’, as some called it,” Kammenos said. He pointed out that the policies imposed on the country had resulted in “70 pct unemployment among the young, 300,000 young people leaving the country, 80 pct of businesses closing, a dismantling of the middle class and impoverishment of the Greek people,” stressing that this must end.
He expressed his belief that the government had the support of all Greeks, which it had succeeded in uniting, stressing the importance of this fact. “What is under negotiation here is Greece – we do not negotiate with our heads bowed, nor on our knees. The Greek people have got to the point of destitution, we will not back down,” he said.
The minister, who was travelling to Evros to coordinate efforts to contain flood damage also announced a decision to reform the armed forces MOMA engineering and construction units, which in the past had assisted in building Greek infrastructure, such as roads and bridges.
The Communist Party of Greece (KKE) ruled out any significant improvement for the Greek people as a result of the government’s attempts to negotiate with Greece’s creditors, in a statement issued on Saturday.
“From the moment that the government, in all ways, expresses respect for the rules of the European Union and negotiates the terms of repayment of a debt not created by the people, it is certain that any agreement with the partners will not lead to a relief for the people, and especially not to recouping the huge losses they suffered all these years,” KKE said.
NO CASH PROBLEM
Greece said on Saturday it had no short-term cash problem and that it will hand its European Union partners a comprehensive plan next week for managing the transition to a new debt deal.
The EU has warned time is running out to avoid a financing crisis in Greece.
Greece faces interest rate payments of around 2 billion euros over February and should repay a 1.5 billion euro loan to the IMF in March.
That has raised concerns the country may suffer a cash crunch, but this was dismissed on Saturday by the Greek official in charge of the government’s accounts.
“During the time span of the negotiations there is no problem (of liquidity). This does not mean that there will be a problem afterwards,” Deputy Finance Minister Dimitris Mardas said on Mega TV.
Asked whether the state may suffer a cash crunch if talks drag on until May, the minister said he did not expect the negotiations over a new deal to last that long. “Even if they did, we can find money,” he said.
Economy, Infrastructure, Tourism and Shipping Minister George Stathakis, in a tweet late on Friday night, denied saying that the Greek state may face liquidity issues in March during an interview with the Wall Street Journal.
The minister said that at no time in the WSJ interview did he referred to a liquidity problem that Greece may face, adding that the policy statements that will be unveiled in Parliament will outline a plan for increasing tax revenues and thus securing the necessary cash flow. He underlined that there will be absolutely no problem until the summer, when the government expects that a deal on a new programme for Greece will be finalised.
The European Central Bank had no choice but to cancel its acceptance of Greek bonds in return for funding after the new government in Athens abandoned its aid-for-reform programme, ECB council member Erkki Liikanen said on Saturday.
“We already communicated in January that the exceptional rule depended on a successful inspection of the reform programme,» Liikanen said in an advanced copy of an interview due to be published in the Sueddeutsche Zeitung on Saturday.
“However we couldn’t assume this. Therefore it was a logical decision. We have to stick to our rules,» he said.
The ECB’s move on Wednesday shifted the burden onto Athens’ central bank to finance its lenders and is seen as raising the pressure on Greece to strike a new reform deal.
STRONG PUBLIC SUPPORT
Three quarters, or 75 pct, of Greeks believe the new government is determined to carry out its election pledges and 72 pct consider the government’s confrontation with the ‘troika’ to be right, according to an opinion poll released on Saturday.
Rougly six in 10 (59 pct) believe that the clash between Greece and its creditors will continue into the coming weeks. The poll also showed that support for the government’s positions does not come exclusively from those voting for the two parties that now form Greece’s coalition government, SYRIZA and the Independent Greeks (ANEL), where backing for the government’s moves stands at 91.5 pct and 91 pct, but also by 43 pct of those who voted for main opposition New Democracy (ND).
The possibility that the country may be forced to leave the euro is feared by 35.5 pct of those asked, 9.5 pct hope for such an outcome and one in three does not believe Greece’s exit from the euro is possible.
Conducted by the University of Macedonia for the medial channel SKAI, it was the first poll gauging public opinion on developments in the wake of the Greek elections.