Greece defiant as creditors pile on the pressure

Greece has said it will not renege on election pledges to end austerity measures as creditors pressed for a deal to free financing and avert a widening crisis.

US president Barack Obama and ECB president Mario Draghi both called on the government to do more to resolve the stand-off amid depleting cash reserves.

Greek officials, including Yannis Dragasakis, the deputy prime minister, stood their ground.

“We want a viable solution within the euro,” Dragasakis said in an interview published yesterday in Athens-based To Vima newspaper.

Still, “we don’t budge from our red lines.” Snap elections or a referendum are possible options should negotiations with creditors stall, Dragasakis said.

European peers want Greece to do more to revamp its debt-burdened economy before they release another tranche of the €240bn bailout programme. At stake is Greece’s ability to avoid a default and stay in the 19-nation eurozone.

The showdown will figure heavily at a meeting of euro-area finance ministers in Latvia on April 24. In the shadow of the brinkmanship, Greek government bonds last week suffered their worst week since Alexis Tsipras was elected as prime minister in January on a platform promising to undo the tough bailout terms.

Greece’s red lines are refusing to cut wages and pensions, introduce new taxes or sell state assets, alternate health and social security minister Dimitris Stratoulis said in an interview on Saturday with Athens-based Skai TV. “The Syriza-led government will carry out the reforms the Greek people need, not ones requested by our creditors,” he said. The country won’t be pressured “by euro-exit threats,” he added.

Greece won’t agree to any privatisation, Panagiotis Lafazanis, the energy minister said yesterday. While “so-called” partners, including unidentified IMF officials, want to “blackmail” the Greek government into adopting measures that would hurt the working class, “we won’t betray the people’s mandate,” he said.

Draghi said it was “urgent” that Tsipras’s government do “much more work” to show it can satisfy the terms of the bailout. “We all want Greece to succeed,” Draghi said on Saturday in Washington. “The answer is in the hands of the Greek government.”

He said Greek banks continue to meet the requirements for Emergency Liquidity Assistance. The ECB funding has so far helped to avoid a financial meltdown as the wrangling over aid has gone on. The aid “will continue to be given to the banks if they’re judged to be solvent and if they have adequate collateral, which is the case now,” Draghi said.

US officials also urged a speedy resolution to Greece’s talks with its creditors. Obama said on Friday that the Greek government needs to show its creditors that “you’re trying to help yourself”, he said.

A deal between Greece and its creditors won’t be ready by the eurozone finance ministers’ meeting, Eurogroup president and Dutch finance minister Jeroen Dijsselbloem said on Saturday. The French and German finance ministers agreed.

German finance minister Wolfgang Schaeuble declined to comment in Washington on Friday when asked whether European partners were preparing a safety net to prevent a euro exit in case of a Greek default.

Bloomberg