Tuesday, February 17, 2015

Greece and the Eurogroup: Nearer the brink

February 17, 2015

It was 18 against one on February 16th, for the second time in less than a week. The Eurogroup of finance ministers presented Yanis Varoufakis (pictured right), their Greek colleague, with a draft statement that he rejected as “absurd” and “unacceptable.” The meeting, which had been billed as a last chance for Greece to reach a deal with its creditors before its current bail-out expires on February 28th, broke up acrimoniously. Later, the Greek government claimed that an earlier version of the statement, which it deemed acceptable in principle, had been replaced with a “radically different text” demanding that the bail-out be extended.

Jeroen Dijsselbloem (pictured left), the Dutch Eurogroup chairman, brushed aside Mr Varoufakis’s objections, insisting that there was still “time and ample room” to agree a deal. The bridging loan that Greece is seeking was simply a different word for a bail-out extension, he said. But Alexis Tsipras, the radical left prime minister whose Syriza party won last month’s Greek election on an anti-austerity platform, would lose credibility both with voters and, more important, his party’s far left if he were to climb down. Observers in Athens predict more posturing before Mr Varoufakis makes a last-minute U-turn and agrees a deal.

Mr Tsipras is riding a wave of popularity that other European leaders can only dream of: an approval rating between 74% and 79% after just three weeks in office. This week thousands of Syriza supporters turned out on two successive evenings to shout pro-government slogans outside parliament. Yet Mr Tsipras is already facing pressure from Panagiotis Lafazanis, minister for “productive reconstruction”, energy and the environment, who is also leader of the party’s far-left faction, known as the Left Platform.


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