Greek and German finance ministers clash at debt relief talks

By The Guardian

Athens’ high stakes brinkmanship with its international creditors appeared no closer to paying off on Thursday, after talks in Germany ended with finance minister Wolfgang Schäuble insisting Greece was responsible for its own plight.

Yanis Varoufakis, the country’s pugnacious new finance minister, ended his tour of European capitals with a tense press conference alongside Schäuble, who repeated his offer to send 500 German tax collectors to Greece to ensure wealthy Greeks pay their taxes and help tackle corruption.

After their meeting in Berlin, Schäuble said he and Varoufakis had “agreed to disagree”; but Varoufakis interjected: “We did not reach agreement because it was never on the cards that we would.”

Later, though he had promised to meet the alarmist warnings of some in the eurozone about the consequences of Syriza’s policies with “a frenzy of reasonableness”, Varoufakis issued a stark warning that ignoring the plight of his countrymen could stoke the rise of nazism.

“When I return home tonight, I will find a country where the third-largest party is not a neo-Nazi party, but a Nazi party,” he said, referring to the far-right Golden Dawn.

Just prior to the Berlin meeting the Russian president, Vladimir Putin, had increased the pressure on eurozone policymakers by inviting the new Greek prime minister, Alexis Tsipras, to talks in Moscow. Tsipras was asked to attend an event on 9 May to mark the end of the second world war.

Schäuble stressed that Germany would “fully respect the mandate” handed to Varoufakis and his colleagues by the Greek electorate in the general election last month, but he said that Germany too has its own democratic pressures.

German public opinion is deeply sceptical about the need for fresh debt relief for Greece, after repeated bailouts since 2010; but Syriza argues that far from being rescued, it has been burdened with a series of impossible-to-repay loans, and has seen growth hobbled by the austerity imposed as a quid pro quo.

Back in Athens, Tsipras told the Greek parliament: “Greece is no longer the miserable partner who listens to lectures to do its homework. Greece has its own voice.”

The radical Syriza government had hoped to receive temporary support from the European Central Bank while it holds debt-restructuring talks with its creditors.

The €240bn bailout from the troika of the European commission, International Monetary Fund and the ECB – which came with stringent conditions, including hefty spending cuts – is due to expire at the end of February.

Syriza has insisted it will not accept an extension of the existing bailout programme; but the financial challenge facing the new government was sharpened on Wednesday when the ECB said it would limit access to emergency liquidity for its banks.

Apparently referring to that decision, which sent bank shares plunging, Tsipras said on Thursday: “Greece cannot be blackmailed because democracy in Europe cannot be blackmailed.”