Greece's new finance minister: 'No debt talks with EU-IMF troika'

[-:Undertaker:-]

http://www.bbc.co.uk/news/world-europe-31055069

Greece's Varoufakis: 'No debt talks with EU-IMF troika'

Greece's new left-wing finance minister says his government will not negotiate over the Greek bailout conditions with the "troika" team from the EU and IMF.

Yanis Varoufakis said he was rather seeking direct talks with eurozone leaders, to try to cancel more than half the money Greece owes.

He was speaking after meeting Jeroen Dijsselbloem, head of the eurozone group of finance ministers, in Athens.

Mr Dijsselbloem said Greece should stick to its reform commitments.

He said Greece and the Eurogroup had a "mutual interest in the further recovery of the Greek economy inside the eurozone" and warned against Athens acting unilaterally in its efforts to renegotiate its bailout.

Greece has endured tough budget cuts in return for its €240bn (£179bn; $270bn) bailout, agreed in 2010 with the "troika" - the European Commission, International Monetary Fund (IMF) and European Central Bank (ECB).

In Berlin, German Finance Minister Wolfgang Schaeuble said the Greeks should abide by their commitments, adding: "There's no arguing with us about this and, what's more, we are difficult to blackmail."
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The BBC's Mark Lowen in Athens writes:

The defiance from Athens was clear: no co-operation with the troika overseeing the bailout. The troika creditors are supposed to wrap up their latest review of Greek finances at the end of February, based on which they would dish out another €7bn of bailout money.

Athens needs the tranche to meet debt commitments later this year. But Mr Varoufakis says his government does not want the money and will not honour commitments made under a previous "toxic" programme.

If the cash is not released, Greece could in theory default on its debt within weeks. Emergency funding would then be cut off to Athens, potentially forcing it to print its own currency. But that doomsday scenario is still highly unlikely.

So much time and money has been invested in "saving" Greece over the past five years, and so much would be lost by a eurozone exit, that a compromise of sorts will probably be reached. But tough negotiations lie ahead - and it may come down to which side blinks first.

Hopefully this is the start of it now, assuming they're serious which observers apparently say they are.

The Euro loons are caught between a rock and a hard place though really, because if they don't give in to the new left-wing government in Athens then Greece will be forced out of the Euro and once it returns to prosperity (and debt-free) it'll then tempt the other Euro countries to follow suit: a domino effect. On the other hand, if the Greek far-left government does manage to negotiate something meaningful then the Spanish and other debt loaded countries will then also be demanding similar conditions and electing similar far-left parties: all which will piss of the northern European countries who don't want a permanent transfer of cash to the south (like a political union) which will only aid right-wing parties in Germany, the Netherlands and France.

Thoughts?

[scottish]

If they do leave the EU/get forced out of the EU and default on their debt then surely they'll be a laughing stock of a country (when it comes to borrowing etc)?

[-:Undertaker:-]

If they do leave the EU/get forced out of the EU and default on their debt then surely they'll be a laughing stock of a country (when it comes to borrowing etc)?

At first, and they'll struggle to borrow: but then they can't borrow now either anyway as they're essentially being propped up by the ECB and IMF with loans and bailouts. If they default, bring back the Drachma then it's going to sting at first but like many of the countries who have defaulted and devalued they'll recover in time. It's better than the current situation which attempts to have politics triumph over economics: and politics can never overcome economics.

The Greeks themselves of course want their cake (the Euro) and to be able to eat it (spend spend spend) but they can't have both.