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Greece: what now after whirlwind week?

Friday, February 06, 2015 - 02:27

Greece's new leaders appear defiant after a week of mixed receptions from their European counterparts, while inside and outside the country itself, the argument over austerity rages on. David Pollard asks: what next in store for its debt negotiations?

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A familiar scene of Greek protest. This, though, just on Thursday night. Part hope - but much anger, at Germany's unreadiness to do deals on debt. Alexis Tsipras is defiant too as his new government's sworn in to parliament. (SOUNDBITE) (Greek) GREEK PRIME MINSTER, ALEXIS TSIPRAS, SAYING: "Greek democracy does not take orders and certainly not through e-mails.'' The day after, and though many stand firmly behind Greece's new leaders, others ask: what next? Tsipras and his finance minister, Yanis Varoufakis, impressed many on a personal level during this week's tour to visit European leaders. Notably, not the one who mattered most: Germany's Wolfgang Schaeuble. Investors worry Greece still doesn't appreciate what it's up against. Alastair McCaig of IG. SOUNDBITE (English) ALASTAIR MCCAIG, MARKET ANALYST, IG, SAYING: ''Unfortunately, the biggest issue that they have is that they are a template for other nations and there's a much bigger picture at large here. Not just what Greece does, but more importantly, what other nations might do if Greece were to get any more flexibility.'' The pressure is mounting on Athens. An ECB decision to stop accepting Greek bonds in return for funds means Greece's own central bank must now finance its financial sector. That's a big setback to efforts to buy time to negotiate a new debt deal. And - amid an exodus of funds - has forced the central bank to reassure depositors their money will be safe. One small hope for Athens, says McCaig, is a scenario where Germany may yet yield. SOUNDBITE (English) ALASTAIR MCCAIG, MARKET ANALYST, IG, SAYING: ''Germany's position ... becomes increasingly isolated as time ticks on. That doesn't mean it's not necessarily the right course of action of course, but they do find more and more dissenting voices as other nations worry about the implications for themselves further down the road.'' Right now there's little dissent from fellow bailout country, Portugal, according to economy minister Antonio Pires De Lima. (SOUNDBITE) (Portuguese) PORTUGAL ECONOMY MINISTER, ANTONIO PIRES DE LIMA, SAYING: "The project of the single currency -- it's not at risk but as it should be understandable it's important that this situation with Greece, even for Greeks interest, the situation should be clarified." One other hope: a revival of euro zone growth. That could happen thanks to a low euro and weaker oil prices, according to new European Commission forecasts. With Greece at top of the growth list next year, it says, if it sticks to its bailout commitments.

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Greece: what now after whirlwind week?

Friday, February 06, 2015 - 02:27