Germany to Greece: Don't mess with us over debt, austerity

[Lite Beer]

Germany to Greece: Don't mess with us over debt, austerity
NICHOLAS PAPHITIS, Associated Press
FRANK JORDANS, Associated Press

ATHENS, Greece (AP) — Greece and its European bailout creditors were in open dispute Friday, with Germany bluntly rejecting suggestions the heavily-indebted country should be forgiven part of its rescue loans and warning against "blackmail" from Athens.

Greece's five-day-old radical left government insists it will honor pre-election promises to seek a cut on most of the country's rescue debt and scrap painful budget measures that were demanded in exchange for the loans.

German Finance Minister Wolfgang Schaeuble, however, warned Athens against strong-arm negotiating tactics in its effort to win debt relief. Rules need to be kept, and trust and reliability were the basis for further solidarity, the dpa news agency reported him saying.

"There's no arguing with us about this, and what's more we are difficult to blackmail," Schaeuble was quoted saying in Berlin.

"We are prepared to offer all cooperation and solidarity," he said, but only if Greece abides by its agreements, under which it received 240 billion euros ($270 billion) in rescue loans.

Without the loans from its fellow eurozone countries and the International Monetary Fund, Greece would struggle to service its debts and avoid bankruptcy.

"The discussion about a debt cut or a debt conference is divorced from reality," Martin Jaeger, a German finance ministry spokesman, said in Berlin earlier.

Greece's Parliamentary Budget Office, which makes quarterly recommendations to lawmakers, warned that the country faces default unless a deal with creditors is reached soon. Greece's next government debt obligations are due in March.

Shares on the Athens Stock Exchange closed down 1.6 percent Friday, capping total losses of 13 percent for the week, while the interest rate on three-year bonds — a gauge of short term risk of default — rocketed to 19.3 percent.

In Athens, Jeroen Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, met with top officials to sound out the new government.

Dijsselbloem acknowledged Greeks have gone through much in recent years to reform their economy, and warned that rash actions by the government would not help.

"Taking unilateral steps or ignoring previous agreements is not the way forward," he told reporters in statements after his meeting with Finance Minister Yanis Varoufakis.

Prime Minister Alexis Tsipras' government, voted in last Sunday, has already said it will cancel several planned privatization projects and considerably scale down planned budget surpluses required to pay down Greece's massive national debt.

Tsipras will launch a small tour of other eurozone countries next week, flying to Cyprus, Italy and France on Monday, Tuesday and Wednesday, respectively.

Greece's bailout, which began in May 2010, runs out on Feb. 28 after an initial two-month extension was granted for completion of frozen negotiations with the so-called "troika" — the European Commission, European Central Bank and IMF.

Greece and the troika hold talks regularly to make sure Athens keeps up its reforms and qualifies for the next installment of loans. Because the latest talks have yet to be concluded, Greece still has to receive the last, 7.2 billion-euro batch of its loans from the eurozone.

Dijsselbloem said the eurozone countries would decide before Feb. 28 what to do about financing Greece. He also rejected Greece's request to hold a conference to discuss restructuring its debt, saying the eurozone's monthly finance meetings would serve the purpose.

But Greek State Minister Nikos Pappas said Athens is no longer bound by the deadline.

"I think you will see in coming days that that deadline does not exist," he told private Mega TV, adding that Greece is aiming for "a political framework to reach a solution."

Varoufakis, for his part, said Greece was not asking for an extension of the existing bailout, as the government disputed the very wisdom of the program in the first place.

"Our intention is to - with an absolute will to cooperate - to persuade our partners ... that our common interest in Europe is served best by a new agreement that will emerge following talks between all Europeans," he said.

He said the new government would not be talking to the bailout negotiators from the troika.

Instead, the minister said, the government would cooperate with the "legitimate institutions of the European Union and the International Monetary Fund."

The new government has indicated that it is not interested in receiving the last 7.2 billion-euro loan installment from its European partners, and will instead focus on debt forgiveness.

Credit ratings agency Fitch said Friday that, in the short term, both sides have a "strong incentive" to reach an agreement to make sure Greece gets the rescue money from the bailout programs. It warned, however, that drawn-out negotiations pose a "high risk" to the country's fragile economy.

___

Frank Jordans reported from Berlin. Derek Gatopoulos and Elena Becatoros in Athens also contributed.

-- (c) Associated Press 2015-01-31

[kingalfred]

Imagine if we could change Governments on a promise to write off its debts ! You are toast if you believe that Greece!

[shirtless]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

[PepperMe]

This is getting interesting. So the EU are slapping Greece down already.

I can see this turning into a case of Greece stalling its repayments to force renegotiation, Then either being asked to leave the Euro or they pull out of their own accord and then default.

I highly doubt the EU will kick them out of the union because of the huge rise of the Eurosceptic parties all over the southern continent. They could follow suit and the whole Euro project will start to crumble.

Tsipras is a hard nose... He can not be seen as weakening on the issue, or he will be overthrown in a heartbeat and he knows it.

Nigel Farage made some very good comments. I can not wait till his next speech in the EU parliament... We all know what subject it is going to be on.

[Kerryd]

Pathetic.

Can't afford to run their country because 1/3 (or more) of the workforce is directly employed by the government in cushy, expensive jobs. Have to borrow money to avoid bankruptcy. Are told they have to start being fiscally responsible or they won't get the money. The people don't like that their gravy train has become a soup kitchen (and of course won't accept that it's their fault to begin with) so they elect a government whose main aim apparently is to go back to the way things were (that landed them in their predicament in the first place !

Their fiscal policy ? Just ask all the countries/organizations that lent them the money needed to avoid bankruptcy, to simply write off that debt. Too easy ! Then they'll be able to borrow more money and get the gravy train rolling again. Don't try to fix the problem, just cover it up long enough to secure your own gold-plated government pension for life, then leave the mess for someone else to fix.

Won't be long before they are in a worse situation than they were to begin with. Only next time, when they need 10s of billions to bail them out, the EU and the banks may not be so willing to help (especially if they stick to a fiscal policy of "borrow money/don't pay it back").

Edited January 31, 2015 by Kerryd

[PepperMe]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

I doubt that very much.

It is the EU and this bailout money that has got Greece into this mess in the first place. As a condition of the bailouts the Troica (EU/IMF/ECB) fly into Athens every month and tell Greece what it has to do..... Effectively, the EU has been running that country since the bailouts. It has dictated every economic policy for the past few years and sucked away Greece's national sovereignty and it has failed miserably.

Since these interferences, the economy have crashed by 25% and youth unemployment has increased to a consistent 50% +.

The Greeks have not been duped Tsipras is not a man to back down... I can assure you of that.

He is taking their country back and he will NOT be taking orders from the troica any more..... They have put Greece in this mess.

[pitrevie]

Pathetic.

Can't afford to run their country because 1/3 (or more) of the workforce is directly employed by the government in cushy, expensive jobs. Have to borrow money to avoid bankruptcy. Are told they have to start being fiscally responsible or they won't get the money. The people don't like that their gravy train has become a soup kitchen (and of course won't accept that it's their fault to begin with) so they elect a government whose main aim apparently is to go back to the way things were (that landed them in their predicament in the first place !

Their fiscal policy ? Just ask all the countries/organizations that lent them the money needed to avoid bankruptcy, to simply write off that debt. Too easy ! Then they'll be able to borrow more money and get the gravy train rolling again. Don't try to fix the problem, just cover it up long enough to secure your own gold-plated government pension for life, then leave the mess for someone else to fix.

Won't be long before they are in a worse situation than they were to begin with. Only next time, when they need 10s of billions to bail them out, the EU and the banks may not be so willing to help (especially if they stick to a fiscal policy of "borrow money/don't pay it back").

I think while what you say is very true is is by no means the whole picture. The fact is that a whole lot of people who should have been paying taxes did not and have never done so despite earning very high salaries.

[NeverSure]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

I doubt that very much.

It is the EU and this bailout money that has got Greece into this mess in the first place. As a condition of the bailouts the Troica (EU/IMF/ECB) fly into Athens every month and tell Greece what it has to do..... Effectively, the EU has been running that country since the bailouts. It has dictated every economic policy for the past few years and sucked away Greece's national sovereignty and it has failed miserably.

Since these interferences, the economy have crashed by 25% and youth unemployment has increased to a consistent 50% +.

The Greeks have not been duped Tsipras is not a man to back down... I can assure you of that.

He is taking their country back and he will NOT be taking orders from the troica any more..... They have put Greece in this mess.

When you find yourself out on a limb that you're sawing off yourself it has to be someone else's fault, right?

The EU was doomed from the start. Roughly speaking, the farther North you go the harder working and more responsible people are. It's more than one different culture all trying to agree what cultural norms should be.

The only way that Tsipras can play tough is with his mouth. His pockets are turned inside out and Germany and others have had it with the culture.

The voters were in fact duped. Greece can't keep spending more than it takes in and It looks like it's reached the end of its rope.

PS The smartest thing the UK ever did was to keep the Pound.

[daveAustin]

Get at em Greece. Don't be bullied by the Germans and the euro rabble. We'd all still be rolling around in the mud if it weren't for you lot.

[ezzra]

The troubling part is that the Greek people themselves are thinking the same as the new government

dose, that they are under no obligation to repay the loan, speaking to few Greek people I know, they're

actually happy to 'shove it up the EU countries' as somehow they feel that they have been

done wrong and were cheated by the landers... and that there will be cold day in hell before Greece

will repay any money back...

[maidee]

greece did a loan thai style

where a loan is seen as a gift

nice people, live over your heads, come cry for a bailout loan and now not want to pay back ... can the EU send some of them armenian/russian gangster to go collect the money ? success guaranteed

[Jay Sata]

The EU needs to ditch a few of the basket cases and Greece is certainly one of them.

[Rob8891]

Germany to Greece: Don't mess with us......

......just remember 1940, OK?

[Paulc01]

So, the Greeks want a First World lifestyle. But they have a Third World economy and a Soviet style government. It ain't gonna happen. Pull the plug on these deadbeats.

[h90]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

The debts will not be always there. Greece could go bankrupt. Declare it doesn't pay back the old debts and start new.

Of course no one ever will give them any money (beside Russia maybe) and they need to have a balanced budget.

But the big question is how big the fallout of this will be. The others won't be happy about it.

[tsigane]

Their fiscal policy ? Just ask all the countries/organizations that lent them the money needed to avoid bankruptcy, to simply write off that debt. Too easy ! Then they'll be able to borrow more money and get the gravy train rolling again. Don't try to fix the problem, just cover it up long enough to secure your own gold-plated government pension for life, then leave the mess for someone else to fix.

I don't see much difference between this situation and the bailout in the US 8 yrs ago.

Greedy bankers lent money to someone who they knew would not be able to return loans. Bankers enjoyed record breaking bonuses while the party lasted. Then when they were to face consequences of their bad investments, government stepped in and screwed savers to save bankers. God forbid that German bankers actually lose money on their bad bets. Losses are for the "little people."

In any loan agreement there are two parties. When things go south, both are responsible. Countries/organizations that lent Greece money to avoid bankruptcy did not do it out of love for Greeks but out of their allegiance to the true masters - banksters. Had Greece defaulted back then, banksters would have lost money. This way, they transferred their bad investments onto balance sheets of the public. Just like Paulson/Bernanke gang did in the US. Different, different, but same...

[ABCer]

It all was written in the books from the very start.

EU - a 'happy' family my arse!

Who in their nightmare got the idea of putting Greece, Italy, Spain, Poland etc. in one bed with France, Germany, Austria and GB etc.?

One thing is ease of border crossing, sharing information and streamlined legal processes. Economics, currencies and immigration is another thing.

Don't the EU apologists know what happens in bed with so many so different parties?

The first who had benefited from this unnatural symbiosis were the Muslims from every point of N. Africa and M. East.

To the tune of 45, 000, 000 of them. This is the result (TROUBLE) number one.

A chain of potential 'bankrupt' member states is the result (trouble) number two.

All followed by relatively smaller 'complications' like entangling more and more countries (with their problems) into this unholy alliance.

I wonder how soon the happy members will start thinking of divorce?

[JockPieandBeans]

The EU needs to ditch a few of the basket cases and Greece is certainly one of them.

I think you have that round the wrong way JS.

The basket case that needs to be ditched is the EU.

[janpharma]

Time to pay for your corruption during all those years Greece...

[fvw53]

Get at em Greece. Don't be bullied by the Germans and the euro rabble. We'd all still be rolling around in the mud if it weren't for you lot.

yes and let those Germans and other EU citizens work up to 67 or even 70 while you Greeks enjoy your pension in the sunshine at 57

[smedly]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

I doubt that very much.

It is the EU and this bailout money that has got Greece into this mess in the first place. As a condition of the bailouts the Troica (EU/IMF/ECB) fly into Athens every month and tell Greece what it has to do..... Effectively, the EU has been running that country since the bailouts. It has dictated every economic policy for the past few years and sucked away Greece's national sovereignty and it has failed miserably.

Since these interferences, the economy have crashed by 25% and youth unemployment has increased to a consistent 50% +.

The Greeks have not been duped Tsipras is not a man to back down... I can assure you of that.

He is taking their country back and he will NOT be taking orders from the troica any more..... They have put Greece in this mess.

Lets put it in simple terms so you can understand

So 20 years ago you buy a house which initially you could afford to pay for from your earnings (self employed)

You pay into a private pension to support you in the latter years

but over the next 20 years you live the high life keep borrowing and spending money on luxury things like cars holidays boats fancy goods beyond your means etc etc

eventually your earnings can no longer cover what you have borrowed so you approach a bank in order to get the short term debt restructured to long term and part of that agreement is that you sell all the luxury items wind your neck in and start budgeting for only what you can afford

So now you are living on a shoestring paying off your debts and being fiscally responsible and no longer can live the high life and it hurts.

You then have the bright idea of just getting all your debt written off and approach your lender who tells you "not possible" but you refuse to pay - from that time on your life goes downhill even further, you lose your business your house your earnings your pension fund and end up living on the street with nothing - that is were Greece is headed

[JockPieandBeans]

Get at em Greece. Don't be bullied by the Germans and the euro rabble. We'd all still be rolling around in the mud if it weren't for you lot.

yes and let those Germans and other EU citizens work up to 67 or even 70 while you Greeks enjoy your pension in the sunshine at 57

That would be an issue to take up with the respective Governments who make up this basket case.

I would bet my house that not 1 of those EU Citizens asked for / voted for / wanted to see their retirement age increase at the whim of their Government.

If you want to lay blame, lay the blame at where it is deserved.

Not with the people who had the least amount of say in the whole EU disaster.

[kingalfred]

Get at em Greece. Don't be bullied by the Germans and the euro rabble. We'd all still be rolling around in the mud if it weren't for you lot.

haha its the Greeks who are in the mud and very sticky mud at that!

[rickirs]

"The new government has indicated that it is not interested in receiving the last 7.2 billion-euro loan installment from its European partners"

Guess what?

The EU isn't interested in lending that last loan installment since Greece has declared it will default on what was already loaned. Maybe Greece should have shut its mouth until AFTER the last installment, then used it to pay the debt service. That would have bought Greece another year of two. It's hard to stick it to the MAN when you're a punk.

[soumanioco]

The fact is that nearly 90 percent of Greece's debt is now owned by the ECB and the IMF. Therefore, it comes down to a political decision rather than anything else.

What the Germans are afraid of is the long queue that is to follow should they cave in and agree to a debt write off.

[midas]

The EU needs to ditch a few of the basket cases and Greece is certainly one of them.

Well in that case why should they even be thinking about using such desperate measures to get Ukraine on board? That's a basket case if ever there was one

[wabothai]

Looks like Greece is going to be devided up between the other European nations.

[His Masters Voice]

Bye Bye Greece ... don't let the door hit you on the way out.

Socialist Sh** Politics, believeing that the Euro Zone owes them something.

[12DrinkMore]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

I doubt that very much.

It is the EU and this bailout money that has got Greece into this mess in the first place. As a condition of the bailouts the Troica (EU/IMF/ECB) fly into Athens every month and tell Greece what it has to do..... Effectively, the EU has been running that country since the bailouts. It has dictated every economic policy for the past few years and sucked away Greece's national sovereignty and it has failed miserably.

Since these interferences, the economy have crashed by 25% and youth unemployment has increased to a consistent 50% +.

The Greeks have not been duped Tsipras is not a man to back down... I can assure you of that.

He is taking their country back and he will NOT be taking orders from the troica any more..... They have put Greece in this mess.

The Greeks lied about their national accounts and paid Goldmann Sachs to fiddle their way into the EUR using some accounting tricks.

Greece never really qualified to become part of the Eurozone,

Then they went on a huge borrow and spend binge using the, at the time, strong currency and low interest rates. Previously they had a feeble currency, constant devaluation and double figure interest rates.

The Greeks always had a mess of an economy, they have wasted a decade to do something about it (really, I suppose 60 years since WWII), and now they have to leave the EUR and go back to being the land of peasants, only this time with an even bigger grudge against the Germans.

Stand by for writing off any money owed to the Germans based on a resurrection of the ridiculous Greek claim for reparations from WWII, and then a walk to the IMF for a handout which will also be considered as a gift.

Although they should really be thinking about going to the World Bank.

[Anthony5]

Looks like voters in greece have been duped, The debt will always be there no matter what your lying politicians tell you ,Greece needs to tighten their belts or go bankrupt.

I doubt that very much.

It is the EU and this bailout money that has got Greece into this mess in the first place. As a condition of the bailouts the Troica (EU/IMF/ECB) fly into Athens every month and tell Greece what it has to do..... Effectively, the EU has been running that country since the bailouts. It has dictated every economic policy for the past few years and sucked away Greece's national sovereignty and it has failed miserably.

Since these interferences, the economy have crashed by 25% and youth unemployment has increased to a consistent 50% +.

The Greeks have not been duped Tsipras is not a man to back down... I can assure you of that.

He is taking their country back and he will NOT be taking orders from the troica any more..... They have put Greece in this mess.

You should do a bit more research on the background of Greece's problems before you comment again.

In a lawless country where nobody bothers to pay taxes or even utilities, how that country ever gonna survive?

Greece has been surviving on borrowed money for a few decades already, and their attitude can be compared with that of the Thais.

Tomorrow is such a long time ahead.