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Greece: Heading for default on loans?

  • April 25th, 2015
  • Posted by EU Australia

athens and parthenonGreece’s left-wing government elected in January continues to find it heavy-going, trying to get debt relief from the country’s demanding financial partners in the Euro Group.

The Finance Minister, Yanis Varoufakis (picture below), who has joint Greek-Australian citizenship after a decade at Sydney University, was this week arguing once more, at a European Union Finance Ministers meeting in Riga (24.2.15).

Yanis-VaroufakisHe put aside reports that some of the other Ministers from the 17 states using the Euro, exasperated, had been calling him names in closed sessions — like “gambler”, “time-waster” and “amateur”.

On Euronews, he said an agreement was close; “fire and brimstone” coming from such gatherings usually indicated progress behind the scenes.

The Euro Group, and its affiliate agencies bankrolling a debt settlement arrangement with Greece, like the International Monetary Fund (IMF), have continued to demand “reforms”, a continued austerity program from Greece, as the cost of financial guarantees for carry-on loans.

With Germany the main lending country, conservative politicians in government there, headed by the Finance Minister, Wolfgang Schaeuble, have stayed emphatic on debt forgiveness – no ‘Marshall Plan’ for Greece.

The Greek government has scavenged through its resources to meet recent payments but needs fresh instalments of loan money in the coming weeks, as part of the ongoing plan, See EUAustralia Online: Europe Summit – New package for Greece, 22.7.11; Greece’s Milestone – Call for aid, 24.4.10.


Yanis Varoufakis has been making the argument that squeezing the economy to bankruptcy will not allow it to recover, and so meet its obligations; he has undertaken to persist with some measures handed on from previous governments, like privatisation, though in that case insisting on retention  of government equity and better pay and conditions for employees.

He has dismissed also the idea of a “Plan B” for Greece, a default on some of its pay-back obligations.

His Prime Minister, Alexis Tsipras, earlier this month was in Moscow (8.4.15), setting off some recollections from history about affiliations between the Greek Left and the then Soviet Union – generating savage over-reactions in that era.

He was quoted agreeing with President Vladimir Putin that EU sanctions could be very bad, and discussing some discounts on gas supply; but he would not, it was intimated to journalists from the Russian side, receive financial credits – were the shaky Russian economy itself be positioned to provide.

Alexis Tsipras has sought to get the emphasis on how the financial plan has undermined living standards, generating excessive pain for his citizens, and voters.

He would have found something to agree with at the Vatican, where Pope Francis, in February and March was reiterating concerns expressed last year about the “throw-away culture of the globalised world economy”; generating gross imbalances of wealth, destroying livelihoods.

Fetishism over money was the problem; the “devil’s dung”, he called it.


Bloomberg, NY, Varoufakis said to take hammering from frustrated Euro Ministers, 24.4.15., (25.4.15).

Efi Koutsokosta, Exclusive: fire and brimstone show EU deal is close, says Varoufakis, Euronews, Lyon, 24.4.15., (25.4.15).