Greek left party says it will scrap bailout deal
GREECE’S leading left-wing party declared the country’s bailout deal invalid yesterday, prompting accusations from its opponents that it will destroy the country and force it to leave the euro.
Alexis Tsipras, leader of the radical left Syriza party that currently has a mandate to form a government, said it would throw out the bailout deal struck with the EU and IMF after claiming it no longer had any democratic legitimacy because only a third of voters cast their ballots in favour of the parties that signed it.
Tsipras insisted that one of his top conditions for those parties wishing to join a Syriza-led government would be to scrap the bailout agreement. And one Greek newspaper reported that two of his MPs suggested nationalising Greece’s banks and using their deposits to fund growth.
In response, Antonis Samaras, who leads the centre-right New Democracy party, which received the most votes but was unable to form a coalition on Monday, said: “Mr Tsipras has asked me to put my signature to the destruction of Greece. I will not do this.”
The chances that a government will now emerge from Athens’ elections are low following yesterday’s negotiations, which suggest that Syriza is prepared to gamble that Brussels would rather give Greece softer terms than kick it out of the euro.
Negotiations between Syriza and left wing group the Ecologist Greens broke down after the latter said that Greece must not be allowed to fall out of the euro but would need a plan if it were to exit.
And German politicians gave an uncompromising message. Martin Schulz, president of the European parliament, said: “The agreements must be respected. I don’t think we can or should renegotiate.”
The patience of Greece’s international lenders was tested the last time the country tried to negotiate changes to its austerity plans in return for a tranche of aid in March. The disagreement sparked the first time that European and German officials began to talk openly of a Greek exit from the euro.
Analysts are now increasingly banking on coalition negotiations failing, resulting in new elections to be held in mid-June. Alliance Bernstein economist Darren Williams said the parties’ positions are likely to harden between now and another poll: “Those elections would almost certainly be cast as a referendum on euro area membership, though this would by no means guarantee a better showing for the mainstream parties,” he said.