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Showdowns over sanctions and bailouts

New Greek Foreign Minister Nikos Kotzias, left,  talking to  German Foreign Minister Frank-Walter Steinmeier  at the start of an extraordinary meeting of the European Foreign Affairs Council, in Brussels, Belgium, on Thursday.

 

By Alexandra Mayer-Hohdahl/Brussels/DPA


Nikos Kotzias had had enough. It was his first visit to Brussels as Greece’s new foreign minister and he was being relentlessly peppered with questions about whether his government was pro-Russian and would break ranks with the European Union on sanctions against Moscow.
“My duty is to make negotiations and not explain to journalists if I’m a good or a bad boy,” he snapped at a press conference on Thursday evening. “We have the same rights (as everyone else), even if we are in a deep financial crisis.”
After the euphoria of a resounding election victory, Greece’s new far-left Syriza government this week had its first taste of the fights it will need to lead with the EU - a bloc that twice helped the country avoid bankruptcy.
Syriza leader Alexis Tsipras campaigned on promises to renegotiate the bailouts granted to Greece by its European neighbours and the International Monetary Fund, which came with painful requirements for budget cuts and austerity measures.
In his first cabinet meeting, Tsipras announced that he would turn his back on several bailout-associated measures, including by blocking plans to privatise two public companies and by increasing the minimum wage.
“All of these actions are contrary to key structural reforms demanded by the troika (of European and IMF creditors) to improve competitiveness and streamline the functioning of the Greek economy,” analysts at Barclays wrote in a research note released yesterday.
“Cancelling them would very likely be a clear provocation to Greece’s creditors and significantly reduce the possibility of a positive outcome of the upcoming negotiations with the troika,” they added.
Senior European officials have warned Tsipras to stick by commitments that past governments made, with several arguing that the bailouts were ultimately granted by European taxpayers - many of which faced a challenging economic situation in their own countries.
Finance Minister Yanis Varoufakis nevertheless declared yesterday that Greece refuses to work with the troika, which comprises the European Commission, the European Central Bank and the International Monetary Fund.
A senior official at the Greek finance ministry had earlier told DPA that Greece is ready to go to the European Court of Justice if its loans are cut off.
The statements came despite a warning by European Parliament president Martin Schulz - the first EU official to visit Athens after the elections - that “pragmatic solutions which can work for both sides” were needed.
“Syriza must realise that it is now the Greek government, not a party running an election campaign,” Schulz told the Kathimerini newspaper. “Everyone must realise that grandstanding and headline-grabbing comments may not be the best tool for the coming weeks.”
The clash over the bailout follows tensions between Brussels and Athens over EU sanctions against Russia.
The new government had publicly objected on Tuesday to a statement by EU leaders raising the prospect of new sanctions against Moscow. The move fuelled speculation that Athens was ready to veto further measures against Russia.
Several Greek ministers later clarified that the problem had not been the sanctions per se, but the way the statement was approved. The damage was already done, however.
“Through the new stance of the Greek government, the debate today has not become easier,” German Foreign Minister Frank-Walter Steinmeier said on Thursday ahead of emergency talks with his EU counterparts - including Kotzias - on the crisis in Ukraine.
“It is difficult to expect a revised common approach to your country, and then take a different policy stance to the rest as your first act in government,” Schulz told Kathimerini.
Kotzias said he was happy with the outcome of the ministers’ meeting, pointing out that no new sanctions had immediately been issued, as Greece had wished. There will now be a “last chance” for a dialogue between the EU and Moscow, the minister said.
Greece will have to take a clear position on EU sanctions sooner than later, however. The ministers will reconvene on February 9 to decide on new travel bans and asset freezes over the crisis in Ukraine, and the issue of further economic sanctions against Russia could come up at an EU summit on February 12.



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