Greece vows to press on despite disappointing EU tour

ATHENS, Greece – Greece’s anti-austerity leaders were back in Athens Friday vowing to keep their promise to renegotiate the country’s huge loans despite having little to show after a European tour aimed at winning allies to their cause.

“We are a sovereign country, we have democracy, we have a contract with our people, we will honour this agreement,” Prime Minister Alexis Tsipras told his hard-left Syriza party in their first meeting Thursday since the January 25 elections.

In a remarkable show of support, thousands of people then gathered outside parliament, standing silently in Syntagma Square, the scene of violent anti-austerity protests in recent years.

“We have nothing to lose,” said Stavroula Drakopoulou, a 55-year-old teacher. An estimated 500 people also gathered in Greece’s second city, Thessaloniki.

Tsipras and Finance Minister Yanis Varoufakis visited Paris, London, Rome, Frankfurt, Brussels and Berlin in the past six days to try to win over EU leaders to their plan to ease the crushing burden of Greece’s debts.

The tour began well but ended with German Finance Minister Wolfgang Schaeuble restating his country’s opposition to debt relief and expressing deep scepticism over the Greek government’s proposals to restructure its EU-IMF loans.

“We even didn’t agree to disagree,” a downbeat Varoufakis told reporters after talks with Schaeuble in Berlin Thursday.

The Greek minister will hope for a more sympathetic ear when he hosts a meeting with US Treasury deputy assistant secretary Daleep Singh later Friday.

US President Barack Obama gave Athens a boost last week when he warned against “squeezing” debt-ravaged countries such as Greece, whose economy has shrunk by one quarter since 2008.

Meanwhile Tsipras must prepare for his first European summit in Brussels on February 12, which will be his first meeting with German Chancellor Angela Merkel.

Finance ministers from all 19 eurozone countries will gather the day before to discuss the stand-off over Greece.

In a sign of the pressure Athens is under to reconcile its domestic promises with its obligations to foreign lenders, the announcement of the government’s legislative agenda was delayed from Saturday to Sunday evening.

Blows from Berlin and Frankfurt

Syriza is the first anti-austerity party to take power in Europe, and its opening move to halt key privatisation projects spooked the markets and raised anew fears of Greece being forced out of the eurozone.

The government also said it would no longer cooperate with the hated “troika” of auditors from the European Union, European Central Bank and the International Monetary Fund who are charged with enforcing the terms of Greece’s 240-billion-euro ($275-billion) bailout.

Tsipras and Varoufakis later softened their tone and their creative proposals for restructuring Greece’s loans were well-received by many economists.

But Germany, viewed by many Greeks as the main obstacle on any easing of austerity, remains opposed.

A debt write-down was not up for discussion, Schaeuble said, adding that he was “unable to hide my scepticism… that some of the measures do not go in the right direction”.

Varoufakis had earlier made a comparison between Greece and Germany in the 1930s when punitive measures imposed after World War I led to the rise of the Nazis.

“If you humiliate a proud nation for too long… without light at the end of the tunnel, then the pressure will rise in this country at some point,” Varoufakis said.

Athens also took a blow from the ECB, which announced late Wednesday that it would no longer take up junk-rated Greek government bonds from the country’s struggling banks.

Europe’s stock markets and the euro fell on the news, while Greek stocks plunged more than nine percent in early trading on Thursday, before recovering to close 3.37 percent down.

The Athex general index opened largely stable on Friday.

While the move ratcheted up the pressure, Athens insisted its banks were safe as long as they still had recourse to emergency liquidity from the Frankfurt-based central bank.

The ECB has given the green light to make up to 60 billion euros ($68.5 billion) in emergency liquidity available to Greek lenders. – Rappler.com