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Brussels warns Greece's Syriza to stick to austerity | Webmarked News

Brussels warns Greece’s Syriza to stick to austerity

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The EU took a tough tone towards Greece after the radical left party Syriza stormed to victory in elections, warning that Athens’ place in the eurozone depended on it honouring agreements on debt and austerity. Duration: 01:12

Brussels warns Greece's Syriza to stick to austerity

Brussels warns Greece’s Syriza to stick to austerity

The EU took a tough tone towards Greece after the radical left party Syriza stormed to victory in elections, warning that Athens’ place in the eurozone depended on it honouring agreements on debt and austerity.

From the tough German Chancellor Angela Merkel to the head of the eurozone’s finance ministers Jeroen Dijsselbloem, Greece was urged to meet its commitments if it wanted any flexibility from its European partners.

Eurozone finance ministers were meeting in Brussels a day after Syriza leader Alexis Tsipras’s bold promises to end “disastrous austerity” and renegotiate its debts raised fears of a Greek exit from the eurozone.

“Membership of the eurozone means that you comply with everything you have agreed with,” Dijsselbloem said as he arrived for the talks, adding that “on that basis, we’re ready to work with them.”

He played down suggestions that any compromise with Greece could include striking out some of the debts it incurred in exchange for a massive 240-billion-euro ($269 billion) EU-IMF bailout, as Tspiras has vowed.

“Writing off the debt… I don’t think there’s a lot of support for that within the eurozone,” the Dutch finance minister said.

– Eurozone exit? –

The mere fact that Dijsselbloem brought up Greece’s place in the 19-country eurozone will stoke fears about the effect of a Syriza win for the single currency, which struck an 11-year low versus the dollar on Monday.

Syriza’s stunning victory also has political implications across Europe, boosting anti-austerity movements across Europe, especially Spain’s Podemos which is hoping for a similar general election win this year.

In Germany, the paymaster of the eurozone bailouts where resistance runs deep to any attempts to abandon austerity, Merkel’s spokesman took a similar line on what Europe expected.

“In our view it is important for the new government to take action to foster Greece’s continued economic recovery,” the spokesman, Steffen Seibert, told reporters. “That also means Greece sticking to its previous commitments.”

Hawkish Finland also ruled out any debt deal.

“Finland will not accept a demand for debt cancellation which made part of the discussions prior to the elections, Prime Minister Alex Stubb said in a statement.

European Commission chief Jean-Claude Juncker said that the EU would “work closely” with Greece, adding that he was “in no way nervous”.

Despite the rhetoric, Brussels is nevertheless set for a “tense” few weeks to come in its negotiations with Athens, a top European official said on condition of anonymity.

Tsipras is set to meet other European leaders for the first time as prime minister at a summit on February 12 when Greece’s fate in the euro and unsustainable debt levels are sure to be key issues.

– Tsipras a ‘pragmatist’

Some believe that the 28-nation EU will be forced to reach some kind of deal in order to avoid Greece becoming the first country to crash out of the euro since its launch fifteen years ago — the so-called ‘Grexit’.

“We will not escape a re-negotiation (of the bailout),” another European source told AFP on Sunday.

However Germany’s European Parliament President Martin Schulz told German radio that the EU held the cards, not Tspiras, “and he knows it”.

“He’s a pragmatist. He will have to find a compromise with his European partners,” said Schulz, who was a rival of Tsipras in the race last year to become head of the European Commission, a post now held by Jean-Claude Juncker.

Analysts said the negotiations would be finely balanced.

It would be a mistake to refuse to reduce Greece’s debt, argued Paul De Grauwe of the London School of Economics, as this would “condemn Greece to several difficult years and encourage extremist political movements… that could strongly shake up the eurozone as a whole”.

Merkel and Syriza are on track “for an exciting game of poker”, said Julian Rappold, an expert on European politics at the German Council on Foreign Relations think tank, adding that Tsipras’s victory could have wider European repercussions.

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Tags : Austerity, stick, Syriza, Greeces, warns, brussels

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