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27/01 – EC has no intention of writing off Greece’s debt; will work “constructively” with Greece

All media outlets give very broad coverage to the Greek elections, with both reports and commentaries on Syriza’s coming to power, and many front pages and editorials dedicated to the issue. Many newspapers report that the Eurogroup met in Brussels yesterday and tempered election congratulations to Alexis Tspiras, the new Greek prime minister, with warnings over the limits of concessions available for his country, even as they hinted at a possible compromise giving Greece more time to repay its loans.

The FT comments that the far-left party’s triumph at the ballot box was met with polite resolve in Brussels and Berlin, intended to contain hopes that voting radical parties into government, in Greece or elsewhere, would be a short-cut to debt forgiveness and fiscal respite. Indeed, several fear that the Greek results could impact the political situation and upcoming elections in countries such as Spain, Ireland or Portugal, which abided by the rules without forcing concessions.

ABC‘s leader writer actually argues that rewarding Syriza’s victory by agreeing to its anti-austerity policies would deliver what the paper calls a “devastating message” to Europe – that voting for demagogic political forces has more advantages than supporting responsible parties. On the other hand, Ralph Sina on rbb believes that Southern Europe is emancipating itself and that the Greek election results will change the political landscape of Europe. Instead, says MDR, Brussels is hinting at the possibility of accommodating Greece with modified credit durations, delayed interest payment or reduced interest rates. In Les Echos’s editorial, Etienne Lefebvre says it is not the time for a debt haircut or the end of budget austerity yet. Mr Tsipras will have to prove himself first and make good on his promise to reform the Greek state, a promise which makes it possible for Syriza to find common ground with the EU and the IMF.
Le Monde reports that aside from UK PM David Cameron, no European leader officially expressed dismay over Syriza’s landslide victory on Sunday. Indeed, they seek to calm things down and not scare the markets. According to EC spokesman Margaritis Schinas quoted in several media outlets, the Commission is ready to work with Greece. In an interview with ARD, President Jean-Claude Juncker said he hopes that he can “constructively work together [with Alexis Tsipras] in the interest of Greece and the entire euro area.” He added that he is convinced that it is not necessary for Greece to receive a debt cut and such a measure is not “on the radar of the European Commission”.

Wolfgang Schäuble, Germany’s finance minister, said that while he respected the election result, Greece’s “obligations” would still apply. Asked whether Greece’s debts could be written down, Jeroen Dijsselbloem, the Dutch chair of the eurogroup of finance ministers, said: “I don’t think there is support for that,” adding that much had already been done to accommodate Greece. However he did stress that the EU would support the government’s endeavours for recovery and would be willing to provide further assistance. In an interview with BFM TV, Commissioner Moscovici says that the most important thing is to take note of the election’s outcome, of the new political landscape, and then to be ready to start working with the new Greek executive “in a constructive way”. The euro area is stable, and Mr Tsipras does not want to leave it, so there is no reason to worry, Mr Moscovici added.

Regarding the campaign announcement made by Mr Tsipras that he would write off part of Greece’s debt, the Commissioner underlines that all decisions will come after a time of honest dialogue. In an interview with ZDF, Martin Schulz says that he is willing to talk and cooperate with Mr Tsipras and his Syriza party but underlines at the same time that tax evasion and corruption cannot be fought with a debt cut. Several newspapers sum up the different reactions by saying that the overall message is that Europe remains open to dialogue with Greece, but Athens must continue to respect the rules.
In an opinion article in Público, João Tavares writes that, after the election, Greece is no longer just a thorn in Europe’s foot, but a social, political and economic laboratory, where Syriza conducts a fascinating and risky experiment. The success of these parties represent the electorate’s wish to end with the old nomenclature, which has long forgotten the most elementary ethics regarding public service. On rbb, Ralph Sina comments that Jean-Claude Juncker and the entire EU are the losers of the Greek elections, noting that Mr Juncker’s efforts to manipulate voters and Angela Merkel’s threat that the euro area would also work without Greece have come to nothing.

Wolfgang Münchau comments in Handelsblatt that he suspects there will be a lot of “unconventional moments” of the new Greek government when wanting to solve the dilemma of pleasing its people and its debtors. El Pais’s leader writer says Europe faces a crucial challenge embodied by the upsurge of populism and nationalism contrary to the integration process, urging the forces still holding a majority on Europe’s political chessboard to seriously reflect on what has happened.
Several newspapers also mention that Syriza has formed a government together with the small national conservative party, the Independent Greeks, with Kristeligt Dagblad underlining that the two parties disagree on a lot, but they agree on EU policy. The possible coalition of left and right wing populists in Athens promotes austerity-opposing parties right across Europe. Le Monde reports that Syriza announced yesterday the implementation of a dozen measures, mainly meant to increase the standard of living of the most vulnerable part of the Greek population. These concern wages, retirement, tax relief and welfare measures. The reform is supposed to cost around €12 billion, half financed via a transfer of European funds and a third via revenue from the fight against fiscal fraud, explains Georges Stathakis, one of the programme’s creators.© European Union, 2015:

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