Galery

1

SYRIZA has departed from its principal campaign promise: the write-off of Greek government debtas evidenced from the statements of Finance Minister Yannis Varoufakis before the Financial Times.

He disclosed the action plan of the Greek cabinet, which he was expected to present to his counterparts at the Eurogroup meeting on Thursday. It includes: firstly, the emission of bonds, the payment of which will be linked to economic growth and which will be replaced by European loans; and secondly, a replacement of the bonds held by the European Central Bank with perpetual bonds.

In his interview, Varoufakis also said that Greece will maintain a primary budget surplus of around 1-1.5% of gross domestic product, "even if this implies not honouring some of our election promises". Among the commitments that the Greek government is ready to make is the conducting of "deep public sector reforms and a fight against tax evasion in order to make the wealthy Greeks, who failed to pay their taxes in recent years, pony up."

In return, Athens is preparing to ask its creditors to adopt a 4-month ‘bridge program’ aimed at the provision of liquidity to the Greek market by the European Central Bank. According to Varoufakis, the amount will not include the €7.2 billion tranche, but €1.9 billion from ECB’s profit. In addition, he emphasised that Athens would push for a review of the rescue programme ‘from scratch’ and does not intend to back down on this demand.

The news that SYRIZA’s government has reneged on its key campaign promise has triggered hundreds of reactions in the Greek media and social networks. Many publications have cast the move as a 180 degree turn. This has compelled the finance minister to come up with a message "to dispel the misguided interpretations regarding my statements made during the meeting with investors in London."

The cabinet's attempts to sell its current tack continued with today's pronouncements by government spokesman Gabriel Sakelaridis, who said on TV Antenna morning block: "The government did not back down on its promises. Some people might have been annoyed by this, but it is a fact." He pointed at Varoufakis’ plan to make his case, saying that "writing off the debt may be carried out through different techniques, with one of them being what Mr. Varoufakis described during his meeting with investors in London."

The government’s attempt to soft-pedal its obvious about-turn on the debt issue got the following headlines in the Greek press:

"Debt substitution rather than cancellation is what Greece has requested with creditors"

"Varoufakis’ plan for debt relief without write-off: ‘development bonds’ and ...’ perpetual bonds’"

"Debt management without write-off"

"Convulsions in government over the debt’s cancellation."