In Showdown With Eurozone Chief Over Austerity, Syriza Refuses To Blink

Greek’s newly appointed finance minister declares: “We will not negotiate with the Troika.”

Syriza, the new ruling party in control of the Greek government, revealed its commitment to its anti-austerity campaign promises on Friday as its newly-appointed Finance Minister Yanis Varoufakis went toe-to-toe with the head of the head of the European Union’s finance ministry and said Greece would no longer bow to the authority of foreign auditors.

Emerging from a meeting in Athens with Jeroen Dijsselbloem, the Dutch lawmaker who currently heads the Eurogroup overseeing the Greek bailout program, Varoufakis said that though the meeting was “productive” his government would not seek to extend the terms of the bailout program nor cooperate with ongoing audits that are part of the terms imposed by the so-called Troika, which includes the EU, the European Central Bank, and the International Monetary Fund.

Emerging from a meeting in Athens with Jeroen Dijsselbloem, the Dutch lawmaker who currently heads the Eurogroup overseeing the Greek bailout program, Varoufakis said that though the meeting was “productive” his government would not seek to extend the terms of the bailout program nor cooperate with ongoing audits that are part of the terms imposed by the so-called Troika, which includes the EU, the European Central Bank, and the International Monetary Fund.

“The Greek government will not negotiate with the Troika,” he said, “Only with official partners.”

According to reporting by Helena Smith, foreign correspondent with the Guardian, “Greece has lost more than a quarter of its GDP, the worst slump in modern times, as a result of consecutive waves of budget cuts and tax rises enforced at the behest of creditors. Varoufakis and the new Greek prime minister, Alexis Tsipras, who also met Dijsselbloem on Friday, are adamant that the government will deal only with individual institutions and on a minister-to-minister basis within the EU.”

At the press conference, citing one of Syriza’s key campaign promises, Varoufakis declared, “Our first action as a government will not be to reject the rationale of questioning [the bailout] program through a request to extend it. We respect institutions but we don’t plan to cooperate with [the Troika's auditing] committee.”

Syriza’s promise to strong firm against Greek’s foreign creditors, Varoufakis added, “enabled us to win the confidence of the Greek people.” That trust, he indicated, would not be broken.

As Smith notes, however, the outcome of the Greek’s new negotiating position on the bailout agreement, led by Tsipras and his outspoken finance minister, is far from certain.

An internationally renowned economist, Varoufakis has been an outspoken critic of the austerity measures demanded in exchange for the aid that has bolstered Greece since its economic meltdown.

But on Friday the Eurogroup president also held his ground. Visibly tense, Dijsselbloem – the Dutch finance minister – said it was imperative that Athens not lose the headway that had been achieved. He reiterated that the creditor group expected Greece to honour the terms of its existing bailout accords. “I realise the Greek people have gone through a lot. However, a lot of progress has been made and it is important not to lose that progress,” he said. “We both want Greece to regain its economic independence as soon as possible. It is of utmost importance that Greece remains on the path of economic recovery. Taking unilateral steps or ignoring previous agreements is not the way forward.”

Those attending the post-meeting press conference with Varoufakis and Dijsselbloem described the tension between the two men as palpable.

As Reuters reports:

Greek media seized on signs of frosty body language between the two men and the hour-long meeting appeared to do nothing to bridge the gap between the government of Prime Minister Alexis Tsipras and European partners.

The meeting marked the start of Greece’s drive to persuade its partners to loosen the strict terms of its 240-billion-euro bailout, which has imposed years of harsh austerity on the country in its worst crisis in decades. It precedes visits by Tsipras and Varoufakis to London, Paris and Rome next week.

And RT aired this segment on the meeting and its potential impacts:

As the the next deadline for bailout plan approaches, Reuters noted how unpredictable the future remains:

Varoufakis gave no indication of what Greece, which must be under an EU/IMF bailout program to ensure its banks have continued access to ECB funding, would do if it cannot reach an agreement by the deadline. The center-right New Democracy party, which lost power in Sunday’s election, said the new government “does not understand what is about to do.”

Dijsselbloem said a decision on the bailout deadline would be reached before the end of February but rejected Greece’s push for a special conference on debt, saying a conference already existed in the form of the Eurogroup of euro zone finance ministers.

Athens is waiting on a final bailout tranche of 7.2 billion euros ($8.13 billion) and has been shut out of international bond markets. It faces around 10 billion euros in debt repayments this summer.

German Finance Minister Wolfgang Schaeuble repeated a message hammered home by Berlin since the new Greek government’s arrival, saying German generosity had already been stretched to its limit and that it could not accept “blackmail”.

France has rejected suggestions that part of the Greek debt could be written off but has been more open to the possibility of offering other forms of relief such as pushing back debt maturity or cutting interest rates.

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