February 13, 2015 / 2:18 PM / 5 years ago

Greece promises to do 'whatever we can' as debt talks cheer markets

BRUSSELS (Reuters) - The Greek government promised to do “whatever we can” to secure a deal with its international creditors next week, cheering investors as experts from both sides began technical talks on Friday to lay the ground for an accord.

Fear of financial chaos have seen savers taking their cash out of Greek banks. Banking sources said this was the reason the European Central Bank offered more emergency funding for Greek banks on Thursday until after crunch talks among euro zone finance ministers on Monday.

Greek markets rose strongly after new prime minister Alexis Tsipras, elected on a promise to scrap a bailout deal he says has impoverished millions, agreed to have aides sit down with officials from the European Union, European Central Bank and the International Monetary Fund - commonly known as the “troika”.

However, the Dutch finance minister, who will chair a meeting on Monday of euro zone colleagues, continued to play down the chances of a rapid conclusion to negotiations on Monday. “I’m really still very pessimistic about that now,” Jeroen Dijsselbloem said.

“Greeks’ expectations of the Greek government are sky high,” he added. “But the possibilities, given the state of their economy, are very limited. So that still needs a huge adjustment and I don’t know if we can figure that out as soon as Monday.”

A spokesman for Tsipras, who had accepted Dijsselbloem’s offer of the technical talks during a first encounter with fellow EU leaders at a Brussels summit on Thursday, said: “We will do whatever we can so that a deal is found on Monday.”

On Wednesday, euro zone finance ministers failed even to agree a broad common statement on how to maintain funding for Greece following the expiry at the end of this month of the three-year-old bailout package - hated by many Greeks along with the troika that has enforced its terms.

Tsipras wants a new financial package, freed of unpopular terminology and the most burdensome conditions. But Germany, backed solidly so far by the other 17 euro zone states, insists his government should extend the current terms for some months, giving it time to develop a new strategy if it wishes.

Greek spokesman Gabriel Sakellaridis also said that if euro zone finance ministers failed to get a deal in Brussels on Monday evening, that would not be catastrophic. That view is not entirely shared in some other European capitals, especially those like Berlin and Helsinki where any deal with Greece will need to be ratified by local parliaments.


Friday’s talks in Brussels, which could continue through to Monday, aim to identify which elements of the bailout are compatible with what Tsipras says he was elected to carry out. EU leaders say Greece is free to propose other ways of managing its budget and huge debts, but that these must give creditors - mostly other EU states - credible prospects of being repaid.

“There have been very good political debates ... and now we need to get down to the hard facts,” a senior EU official close to the talks said of the efforts to identify areas of agreement and divergence between the creditors’ scheme and the government.

“On Monday, we expect a description of what are the overlaps ... and what are the divergences,” the official said.

Pierre Moscovici, the former French finance minister who now runs economic affairs for the European Commission, said he was “optimistic” about a deal next week and warned against a failure that many fear would bring unpredictable disruption to Europe.

Greek Prime Minister Alexis Tsipras addresses a news conference after a European Union leaders summit in Brussels February 12, 2015. REUTERS/Francois Lenoir

He said Tsipras “must respect promises and at the same time we are ready, we Europeans, to see what margins of maneuver are possible.”

Greek spokesman Sakellaridis insisted, however, that Athens remains opposed to implementing reforms that intensify austerity cuts and weaken the social fabric.

In a reminder of the gulf of ideology lying behind the hard finance of the negotiating table, Greek Finance Minister Yanis Varoufakis, a fast-talking academic economist, told German news magazine Der Spiegel that writing off some debt - a “haircut” would be cheaper for Athens’ creditors. Such a move is anathema to other governments, especially in Berlin.

Underlining how the crisis touches deep historical emotions across Europe, a spokesman for German Finance Minister Wolfgang Schaeuble condemned a cartoon in a newspaper close to Tsipras. Showing Schaeuble in a Nazi uniform, it evoked the Holocaust by having him saying to Greeks: “We insist on soap from your fat.”


Athens' ATG .ATG equity index rose more than 5 percent, pulled up by banks: "The problem appears to be in the semantics of any agreement, so that both Germany and Greece don't lose face," said Toscafund analyst Takis Christodoulopoulos. "But you would have thought the lawyers would be able to sort this out."

At Thursday’s EU meeting, Tsipras presented his views to fellow leaders but summit chairman Donald Tusk ruled out debate on the debt crisis, saying presidents and prime ministers did not want to meddle in talks run by the Eurogroup of finance ministers.

The 40-year-old novice premier found no meeting of minds around the table, people in the room told Reuters.

Slideshow (5 Images)

He scored points by making his first intervention to counter concerns that he might veto EU efforts to maintain economic sanctions on Russia over Ukraine. But his speech on the need to end austerity in Greece, while delivered in polite tones, failed to impress fellow leaders.

German Chancellor Angela Merkel, vilified by the Greek left as Europe’s “austerity queen”, said Berlin was ready for a compromise: “However, it must also be said that Europe’s credibility naturally depends on us respecting rules and being reliable with each other,” she said.

Support among Germans for Greece staying in the euro zone has grown over the past three years despite the new government in Athens rejecting the bailout, a poll for German television ARD showed on Friday.

Editing by Peter Graff

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