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07/04 – Greece: Repayments, the IMF and ties with Russia

The European press of the few past days has widely covered the meeting between Greek Finance Minister Yanis Varoufakis and IMF Managing Director Christine Lagarde in Washington on Sunday. Media highlighted Mr Varoufakis’s statement that his country will pay next Thursday the €460 million it owes to the IMF.

A MDR programme reports on Ms Lagarde’s reaction, praising Greece for its promise and saying she respects Mr Varoufakis’s work. Several newspapers – such as Les Echos, Corriere della Sera, The WSJE and Bursa – quote Mr Varoufakis, stressing that Greece “intends to meet all its financial obligations.” The French economic newspaper says that the Greek government is trying, against all odds, to convince its creditors of the need to grant it more political and financial freedom.

“Greece turns to US as its savior from austerity”, reads The Guardian, while saying that Mr Varoufakis continued efforts yesterday to drum up support in the US for his debt-stricken country as speculation mounted over the ability of the Athens government to survive in its current form.

In an interview with NERIT TV, Deputy Head of the EC Representation in Greece Argyris Peroulakis spoke about the course of the negotiations between the Greek government and the partners. Mr Peroulakis stressed that from the beginning that the EC has tried to play a mediatory role, trying to bridge the differences. He underlined that EC President Jean-Claude Juncker will do anything in his power in order for a solution to be found, expressing his optimism for an agreement between Greece and the partners.

In an interview released in Thursday’s Der Kurier, European Commissioner Johannes Hahn described the reform debate about Greece as a serious situation. He says that the European Commission is patient, but it is now up to the Greek government to present the required reform proposals. Croatia’s Dnevnik and Index quote former EC President José Manuel Barroso saying for BBC that the Greek government made “completely unrealistic promises” to voters that it cannot now fulfil. Greece’s demands were “completely unacceptable to other countries”, Mr Barroso added. The current situation in Greece still provides contradictory comments.

In a column for Libération, Professor Bruno Amable discusses the increasing pressure of Greek “creditors” to implement “reforms”. He believes that criticism of the “institutions” regarding too optimistic Greek estimates is “quite funny”, while those made by the Troika were also very far from reality. These “objections […] are only pretexts to continue the game which has lasted since Syriza’s victory: subjecting financial assistance to the Greek government’s rejection of its leftist programme”; something that Syriza does not plan to do, Mr Amable underlines.

As for criticism made towards Greece, Die Welt’s Martin Greive writes that the Greek government has shown itself to be “uncooperative and inept” and that the EU should prepare itself for a Grexit unless it wants to allow itself to be blackmailed. Mr Greive further stresses that while a Grexit would damage the euro´s integrity, the EU cannot afford to keep Greece in the euro area at any cost.

Finland’s Aamulehti reports on Nordea chief economist Aki Kangasharju’s opinion. He does not think Syriza would like Greece to leave the euro area, but a political crisis might not provide another option. Syriza should be smart enough to understand the havoc a Greek euro exit would cause, adds Mr Kangasharju. Thursday’s daily Äripäev reports that Columnist Martin Wolf wrote in The Financial Times that keeping Greece in the euro area would be the best option. He suggested two solutions: one would foresee a new assistance programme that would allow debt relief to Greece if the country implements necessary reforms; the other would include an immediate decrease in Greece’s debt burden to a level where Greece would no longer receive foreign aid.

European media also continue to provide many comments on the upcoming controversial visit of Greek Prime Minister Alexis Tsipras to Moscow tomorrow and his supposed close ties with Russia. In an interview with a MDR 3 programme, Heribert Dieter from the Institute for Policy and Science (SWP) states that this visit could be used to prepare a deal in which Greece votes against European sanctions against Russia, in exchange for offering Moscow prospecting rights for oil reserves in the Aegean Sea.

Along the same lines, The FT notes that the big fears of European diplomats is a “Trojan horse” plot, referring to Russia extending billions in rescue loans in exchange for a Greek veto on sanctions. “Under-pressure Greece casts a wider net in search for friends”, says The Daily Telegraph’s Mehreen Khan, underlining that “the Leftist government has intensified its flirtation with a triumvirate of pariah states – Russia, China, and Iran.”

In an opinion piece for Diário de Notícias, Wolfgang Münchau considers that “Tsipras will not find salvation in Moscow”. According to him, Greece should not ask for Russia’s financial assistance, but instead Greece should default, with Europe’s support for a monetary transition. Imerisia however reports that the Greek government has rejected the scenarios according to which it would ask for a financial aid of Russia.

Meanwhile, Les Echos further reports that discussions with “the Euro-working group” will resume on Wednesday and Thursday. The Eurogroup meeting on 24 April is the last possible deadline to reach an agreement on releasing a part of the funds expected by Athens, otherwise the default could materialise. Greek Mega TV and Naftemporiki – among others – say that Mr Varoufakis expects an agreement at this Eurogroup meeting. While El Periodico notes that Greek authorities would be hopeful of reaching agreement with the Eurogroup later this month on the last tranche of the country’s rescue package,

Nordea chief analyst Jan von Gerich says in HS that the EU and IMF will decide on a new bailout during the summer unless a miracle happens in the Greek economy or the country receives further debt relief. In a contributing article in Der Standard, Günter Hager-Madun criticises the rigid stance of the Eurogroup “partners” towards Greece. Declan Costello, representative of the EC on the budget control team of the institutions, had the audacity to demand that a package of measures to alleviate the worst of the plight in the country be revoked, he says. Corriere della Sera reports that it is thought that Mr Tsipras might exclude the most extreme wing of Syriza from the coalition of parties supporting his government.

Comments
  1. […] is due to pay €460 million to the IMF, but stalled negotiations with Greece’s EU creditors had many worried that the […]

    Pingback by Greece Promises To Pay, But With What Cash? | AthensWire on April 9, 2015 at 4:33 am
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