Merkel: Syriza leader will do business

German Chancellor Angela Merkel is convinced Greek opposition leader Alexis Tsipras will do business with other euro-region governments if he wins next week’s election and scale back his demands that put him on a collision course with creditors, German government officials said.

With polls showing Tsipras’s Syriza alliance holding its lead before the January 25 election, Merkel views him as the kind of politician who would become more pragmatic once he’s in power, one official said.

Scope for easing the terms on bailout loans awarded to Greece starting in 2010 is limited by a 2012 EU accord, restricting the room for manoeuvre of any Tsipras-led government, said another official.

Both asked not to be named because the chancellery discussions are private. Merkel’s view contrasts with the election rhetoric of Greek Prime Minister Antonis Samaras, who says a Syriza victory would cause default and Greece’s exit from the euro.

While Tsipras has called for a debt cut and an easing of austerity, he has retreated from some of the positions that unnerved investors after Samaras called early elections in December.

At the same time, Merkel is sticking to her position that the next government is tied to the commitments its predecessors made to the rest of the euro region, whoever wins the election.

One of the German officials said Greece already has a favourable debt structure, with 30-year repayment periods on loans from European governments and a multi-year waiver on interest payments, leaving little space for further relief on interest or maturities.

Bloomberg