Greek prime minister vows no capitulation to creditors

Greece’s fellow eurozone member states, including Germany, must approve the release of the remaining €7.2bn (£5.25bn) in bailout funds the country is expecting.

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The Independent Online

Germany turned the screws on Greece again yesterday, as officials insisted Athens has still not provided a satisfactory programme of economic reforms to its single currency partners.

However, in a defiant speech, the anti-austerity Greek prime minister, Alexis Tsipras, warned that his government would not “capitulate” and would keep on pushing for a “fair compromise” with its creditors. Greece’s fellow eurozone member states, including Germany, must approve the release of the remaining €7.2bn (£5.25bn) in bailout funds the country is expecting.

Without the cash, Greece could run of money to pay its civil servants by the end of next month and might be unable to meet a €450m loan repayment to the International Monetary Fund which is due on 9 April.

Greece has prepared a list of proposed economic reforms, but sources in Berlin said yesterday that it was not good enough to unlock the vital funding. “We need to wait for the Greek side to present us with a comprehensive list of reform measures which is suitable for discussion with the institutions and then later in the Eurogroup,” said Martin Jaeger, a spokesman for the German finance ministry.

Chancellor Angela Merkel, on a visit to Helsinki, also implied Athens was still falling short. “The question is, can and will Greece fulfil the expectations that we all have?” she asked.

According to Greek sources, Athens’s plan, which is projected to raise some €3.7bn this year, includes a crackdown on tax evasion through thorough audits of offshore bank transfers. Other proposed revenue raisers are a value-added tax on the lottery, the auction of television broadcast licences and a smuggling crackdown.

But, in an indication that Mr Tsipras intends to partly reverse the previous administration’s privatisation programme, the plan also targets only €1.5bn of revenues from state asset sales, down from €2.2bn in the previous budget.

And in a speech to the Athens parliament last night, Mr Tsipras insisted, once again, that Greece’s large national debt needs to be restructured – anathema to Greece’s eurozone sovereign creditors.

Relations between Greece and Germany collapsed after the election victory of Mr Tsipras’s anti-austerity Syriza coalition in January. But writing in a German newspaper yesterday, Yanis Varoufakis, the Greek finance minister, signalled a desire to improve things by calling for an end to the “toxic blame game” between the two countries.

Mark Weisbrot of the Centre for Economic and Policy Research think-tank yesterday accused Brussels and Berlin of deliberately trying to undermine the Greek economy in order to force concessions from Athens.

“The European authorities want to show who is boss,” he said. “This is a government they didn’t want. And they really don’t want this government to succeed.”

Greece and its eurozone creditors struck a deal on 20 February to extend the bailout by a further four months, giving the country’s banking sector continued access to crucial funding from the European Central Bank and preventing the country crashing out of the single currency. But that was only an interim deal and Brussels and Berlin made it clear the release of the cash Greece needs over the rest of this year was contingent on serious structural reforms by Athens.