Greece debt talks offer slim hopes for Ireland

Ireland could find its debt further alleviated if Greece is successful in renegotiating its debt burden.

Finance Minister Michael Noonan left the door open to seek further concessions from its debtors yesterday as the new Greek government said it would follow through on election promises to end austerity.

Asked if he would be watching with interest whatever deal the left-wing government in Athens won from the troika with a view to looking for similar concessions for Ireland, Mr Noonan said: “I would of course.”

He later added: “My programme is to continue to make the Irish debt even more sustainable.”

Syriza’s rise to power in Athens promises to offer the troika its first major opposition to its programme of austerity as a way of fixing a country’s fiscal ills.

Sworn in as prime minister, party leader Alexis Tsipras said Syriza’s victory was “one for all the people of Europe that are fighting against austerity”.

Mr Tsipras has laid out a wide-ranging programme to reverse many of the effects of austerity, including raising the minimum wage, but he will need money to do this.

Greece’s new finance minister, Yanis Varoufakis, had a 15-minute phone call with Jeroen Dijsselbloem, president of the Eurogroup, the meeting of eurozone finance ministers, during which he confirmed Greece was committed to keeping the euro.

He said “he would work with us very closely and was adamant about remaining in the eurozone and on finding solutions that work for both sides. It was a good start,” said Mr Dijsselbloem.

However, in the first salvos in a battle between Athens and Brussels, Mr Dijsselbloem made it clear that Greece has to abide by the terms of its €240bn bailout.

The first test is just weeks away, with the Athens government needing to reaffirm its commitment to the deal with the troika before the end of February, when the next and final crucial instalment of their loan is due.

Without that, the country will be cut off from finance and will be unable to negotiate a new, cheap credit line from the EU.

Mr Varoufakis did not support the idea of a debt conference, but advised Greece to negotiate directly with the troika to make its debt more sustainable.

Mr Noonan said Ireland had restructured its €67bn debt by lengthening the number of years it has to repay the money and via concessions on the interest rate, including by borrowing on the open market to repay expensive IMF loans.

“I would suggest the way forward is to make their debt affordable by restructuring and we will see then what way the new Greek government handles the negotiation,” he said.

However, Greece still has a long way to go to this point, said Mr Noonan, as markets were charging Athens eight times the interest rate on 10-year bonds that they were charging Ireland yesterday.

Debt forgiveness appeared to be off the table, despite some talk by Syriza in their campaign. This was the message from Berlin, which insisted that a third haircut was not an option.