Tensions With Germany Over 'Greedy' Greece's Debt

Greece, whose economy has shrunk by a quarter in six years, owes 320 billion euros (USD 365 billion), equal to 175 percent of its annual economic output.

Published: 26th February 2015 11:04 PM  |   Last Updated: 26th February 2015 11:04 PM   |  A+A-


ATHENS: Tensions emerged today between Greece and Germany as attention turned to Athens's huge debt pile two days after the stricken eurozone country secured an extension of its bailout.

Greece, whose economy has shrunk by a quarter in six years, owes 320 billion euros (USD 365 billion), equal to 175 percent of its annual economic output.

Prime Minister Alexis Tsipras, which swept to power last month on a wave of anger at years of austerity cuts, wants to use a four-month bailout extension secured on Tuesday to renegotiate this debt mountain.

Finance Minister Yanis Varoufakis, the frank-talking economics professor hired by Tsipras to reach a better deal with Greece's creditors, called yesterday to "begin immediately" a discussion on this.

But with Greece have already secured a 100-billion-euro write-down of its debt to private creditors and two bailouts of 240 billion euros, German Finance Minister Wolfgang Schaeuble expressed today his "disbelief" at any such suggestion.

"I can't see anything in what Varoufakis is doing that makes life easier for us," the veteran German minister was quoted as telling a parliamentary group meeting.

"No more billions for the greedy Greeks!" screamed mass daily Bild under a huge "Nein!" ("No!") headline.

The extension to Greece's lifeline still needs approval from the German parliament and possibly Greece's, but this should be a formality despite unease among some lawmakers in both countries.

To secure the lifeline, Tsipras's new hard-left government published a six-page list of proposed reforms focused on boosting tax receipts and cutting spending through improved efficiencies.

But Tsipras, 40, had to temper campaign promises to hike the minimum wage, reinstate laid-off civil servants and alleviate poverty by vowing that this would be done only in consultation with Greece's creditors.

Varoufakis meanwhile told Bloomberg TV in an interview that 700 million euros was deposited at Greek banks on Tuesday.

That is a fraction of the 20 billion euros withdrawn in panic when elections were called and Greece lurched into a new crisis in December, but Varoufakis said this showed confidence was returning.

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