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Greece cranks up eurozone tensions by rejecting bailout extension

by: Laura Dew
  • 09/02/2015
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Greece cranks up eurozone tensions by rejecting bailout extension
Greece's bailout package has "failed" and the country will not seek an extension when the deal expires at the end of February, according to new prime minister Alex Tsipras.

Speaking last night ahead of a crucial EU summit this Thursday, the Syriza leader did little to justify eurozone policymakers’ hopes that he would signal a change of position following a week of meetings with other leaders.

Instead, Tsipras said Greece will pursue a new bridge agreement when the terms of the existing bailout package end on 28 February. This agreement would last until June and not “condemn us to further austerity”, the prime minister added.

The EU has already stated that it does not offer bridge loans. Tsipras and his finance minister Yanis Varoufakis have so far failed to win support from other eurozone nations for a restructuring of the country’s debt.

Greece is due to present its economic reform plans to eurozone leaders on Wednesday, but could find funding from the European Central Bank (ECB) cut off unless a deal is agreed by 28 February.

The ECB has already restricted Greek banks’ access to cheap cash. The final step would be to cut off the central bank’s emergency liquidity assistance programme, putting Greece’s membership of the eurozone at further risk.

Announcing his new government’s plan for reform yesterday evening, Tsipras said Syriza will seek to restore the minimum wage to pre-crisis levels, abolish a property tax that helped Greece post a Budget surplus last year, crack down on tax evasion and end the country’s €25bn privatisation programme.





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