Alexis Tsipras said he expects the European Union will do all it can to keep Greece in the euro even if he wins elections and carries out his promise to repeal the austerity measures required to receive emergency loans.
“We have no sense that European partners will follow this tactic of blackmail heard from some quarters and stop funding,” Tsipras, whose Syriza party is vying for first place in pre- election polls, said in an interview in Athens today with Bloomberg Television. “Something like that would be catastrophic not only for Greece but for the entire euro area.”
Tsipras’s promise to abrogate the terms of the bailout amounts to a bet the EU and International Monetary Fund will stop short of kicking Greece out of the 17-nation euro. The cuts required for 240 billion euros ($303 billion) of aid over the past two years have deepened the country’s worst recession since World War II. Greeks vote a second time in six weeks on June 17 after a May 6 ballot failed to yield a government.
“We want to simply convince our partners that it’s in the interests of all to stop sending EU taxpayers’ money into a bottomless pit,” Tsipras said. “This money should be used properly in a program that is effective and not on a memorandum that has failed.”
Syriza was propelled to second place in the inconclusive May 6 vote. Most opinion polls show Syriza and New Democracy, which backs the bailout, running even for first place. According to the last opinion polls on June 1, neither has enough support at this point to rule alone.
Tsipras has said he’ll try to keep Greece in the euro while pledging to cancel austerity measures. Fitch Ratings said today that a Greek exit from the euroa would have a “severe” indirect impact on banks throughout the euro area, requiring a “robust” response from policy makers to prevent contagion.
Investors will target debt-laden Italy, a Group of Eight country and the third-largest euro economy, if Greece is ejected from the currency, Tsipras said. “When you give a sign that a country can be led to hell, then they will rush to attack the next weak link, which is Italy.”
A Syriza-led government would revoke all austerity measures that have deepened the economic slump and enact a plan for economic and social development, taxes on the wealthy, nationalize “and socialize” banks while seeking a renegotiation of the loan agreement.
“We have empty funds, public funds, bankrupt pension funds and a banking system hanging from a thread,” he said. “The most important thing right now is to restore a climate of confidence.”
Asad Khan
Financial Analyst (CFB)
050-8774861
asad@cfb.ae
“We have no sense that European partners will follow this tactic of blackmail heard from some quarters and stop funding,” Tsipras, whose Syriza party is vying for first place in pre- election polls, said in an interview in Athens today with Bloomberg Television. “Something like that would be catastrophic not only for Greece but for the entire euro area.”
Tsipras’s promise to abrogate the terms of the bailout amounts to a bet the EU and International Monetary Fund will stop short of kicking Greece out of the 17-nation euro. The cuts required for 240 billion euros ($303 billion) of aid over the past two years have deepened the country’s worst recession since World War II. Greeks vote a second time in six weeks on June 17 after a May 6 ballot failed to yield a government.
“We want to simply convince our partners that it’s in the interests of all to stop sending EU taxpayers’ money into a bottomless pit,” Tsipras said. “This money should be used properly in a program that is effective and not on a memorandum that has failed.”
Syriza was propelled to second place in the inconclusive May 6 vote. Most opinion polls show Syriza and New Democracy, which backs the bailout, running even for first place. According to the last opinion polls on June 1, neither has enough support at this point to rule alone.
‘Clear Direction’
“After two consecutive elections the country needs a government with a clear direction,” Tsipras, 37, said. “That’s either a government that continues with the bailout or a government with a core from the left, with Syriza at the core, which will cancel the bailout and replace it with a growth program.”Tsipras has said he’ll try to keep Greece in the euro while pledging to cancel austerity measures. Fitch Ratings said today that a Greek exit from the euroa would have a “severe” indirect impact on banks throughout the euro area, requiring a “robust” response from policy makers to prevent contagion.
Investors will target debt-laden Italy, a Group of Eight country and the third-largest euro economy, if Greece is ejected from the currency, Tsipras said. “When you give a sign that a country can be led to hell, then they will rush to attack the next weak link, which is Italy.”
Euro ‘Convictions’
Tsipras’s view that Greece won’t be kicked out of the euro, membership of which is seen as irrevocable by its fouding treaty, “is based on the analyses of the most credible European and international economists, cost-and-benefit analyses of one or the other scenario,” he said in response to a question on whether he has been in touch with any EU official. “Our conviction isn’t based on public relations or on some confirmations from politicians.”A Syriza-led government would revoke all austerity measures that have deepened the economic slump and enact a plan for economic and social development, taxes on the wealthy, nationalize “and socialize” banks while seeking a renegotiation of the loan agreement.
“We have empty funds, public funds, bankrupt pension funds and a banking system hanging from a thread,” he said. “The most important thing right now is to restore a climate of confidence.”
Asad Khan
Financial Analyst (CFB)
050-8774861
asad@cfb.ae
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