The leader of the major Greek opposition party Coalition of the Radical Left (SYRIZA), who has waffled on how he would handle the bankrupt Greek economy if he ever comes to power, now says he would revise the terms of international bailouts and give the lenders a 33 percent haircut on what the country owes.
Greece is surviving on $325 billion in two rescue packages from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that run out this year, but they came with attached harsh austerity measures that have created record unemployment and deep poverty.
SYRIZA leader Alexis Tsipras said he’d try to revise the terms but would renege on one-third of the debt because he says there’s no way Greece can pay it.
He had previously suggested walking away from the deal entirely, which critics said would leave Greece broke and likely forced out of the Eurozone of the 18 countries using the euro, and unable to borrow from the markets either.
“The solution isn’t more loans. The solution is fewer loans and less debt,” Tsipras, whose party leads Prime Minister Antonis Samaras’ conservative New Democracy in opinion polls, told the Europresse association on a visit to Paris.
Tsipras has predicted that Greece’s coalition of ruling parties, New Democracy and its partner, the PASOK Socialists, will be repudiated in May municipal and European Parliament elections and its fragile three-vote majority in the Parliament will disappear, leading him to come to power.
Tsipras called for an international conference modeled on a 1953 London agreement among Western powers that cut the debts of West Germany by 50 percent after World War Two.
Such a negotiation should cancel part of the debts of Greece and other peripheral euro zone governments and launch a “new deal” investment drive to revive growth and enable them to meet their remaining obligations, he said, Reuters reported.
Tsipras said German Chancellor Angela Merkel, whose country is the biggest lender and has insisted on austerity, would come to realize that an organized debt write-off was a more sustainable solution for Germany than continuing to pour loans into countries that could never repay them because austerity policies were causing endless recession.
While he wouldn’t answer whether he would have Greece default – which would require taxpayers in the other 17 Eurozone countries to pay the bill for generations of wild overspending by Greek governments, hes said ,”One weapon we could use if our partners are very, very violent (tough) is to stop repaying interest in order to finance the Greek economy. But this is not our intention,” he said. “Our position is to try to find a consensus solution.”
Tsipras said he respected the taxpayers of other Eurozone countries which had lent Greece more than 100 billion euros ($137 billion) as part of the bailouts but said they didn’t realize most of the money went back to banks and not society or economic development.
Asked what proportion of its debt Athens needed to write off, he said about 60 percentage points of Gross Domestic Product – the difference between a current debt level of about 175 percent of GDP and the Eurozone average of around 110 percent of GDP.
“Greek creditors want at least part of their money back. That’s not possible in the current situation,” he said.