Greece rejects cooperation with "troika"

Jan 30, 2015, 4:19 PM EST
Eurogroup chairman Jeroen Dijsselbloem (L) and Greek Finance Minister Yanis Varoufakis (R) give a press conference after their meeting in Athens on January 30, 2015.

Greek Finance Minister Yanis Varoufakis on Friday rejected cooperation with the "troika," consisting of the European Commission, International Monetary Fund, and European Central Bank. This sets the stage for chilly relations between Athens and the rest of the EU and is unsettling the markets as fears of a "Grexit" are revived. According to the BBC,  Varoufakis said he was rather seeking direct talks with eurozone leaders, to try to cancel more than half the money Greece owes. He was speaking after meeting Jeroen Dijsselbloem, head of the Eurogroup - the eurozone finance ministers. Mr Dijsselbloem said Greece should stick to its reform commitments. He said Greece and the Eurogroup had a "mutual interest in the further recovery of the Greek economy inside the eurozone" and warned against Athens acting unilaterally in its efforts to renegotiate its bailout. Mr Varoufakis, meanwhile, said Greece was not asking for an extension of the existing bailout, but seeking a "new agreement that will emerge following talks between all Europeans". He said he would he seek "maximum co-operation" with Greece's international creditors, but that he would not work through the "troika", which he called "a committee built on rotten foundations".

Dijsselbloem said a decision on the bailout deadline would be reached before the end of February but rejected Greece's push for a special conference on debt, saying a conference already existed in the form of the Eurogroup of euro zone finance ministers, as Reuters noted. Athens is waiting on a final bailout tranche of 7.2 billion euros ($8.13 billion) and has been shut out of international bond markets. It faces around 10 billion euros in debt repayments this summer. German Finance Minister Wolfgang Schaeuble repeated a message hammered home by Berlin since the new Greek government's arrival, saying German generosity had already been stretched to its limit and that it could not accept "blackmail".

The Guardian pointed out that Greece has lost more than a quarter of its GDP, the worst slump in modern times, as a result of consecutive waves of budget cuts and tax rises enforced at the behest of creditors.  Standing his ground after talks in the capital with Jeroen Dijsselbloem, head of the Eurogroup of EU finance ministers, Yanis Varoufakis said Greece would not pursue further negotiations with the body of technocrats that has regularly descended on the country to monitor its economy. Nor would it be rowing back on election-winning pledges by asking for an extension to its €240bn (£180bn) bailout programme. “This platform enabled us to win the confidence of the Greek people,” Varoufakis said, insisting that the logic of austerity had been repudiated by voters when the far-left Syriza party stormed to victory in Sunday's election. 

So much time and money has been invested in "saving" Greece over the past five years, and so much would be lost by a eurozone exit, that a fudged compromise of sorts will probably be reached, the BBC concluded. But tough negotiations lie ahead - and it may come down to which side blinks first.