Tsakalotos Admits Creditors Beat SYRIZA, Grexit Threat Failed

Αssociated Press

FILE - Greek Ex-Finance Minister Euclid Tsakalotos arrives to the Eurogroup Finance Ministers meeting at the European Council headquarters in Brussels, Monday, March 11, 2019. (AP Photo/Francisco Seco)

Greek Finance Minister Euclid Tsakalotos said the ruling Radical Left SYRIZA’s strategy to use a threat of taking the country out of the Eurozone in 2015 when dealing with creditors backfired when it found Germany, one of the biggest lenders in bailouts, didn’t care.

“We tried but we were defeated,” he admitted, something that Prime Minister Alexis Tsipras hasn’t done as he has boasted he’s brought the country to recovery from a nearly nine-year-long economic crisis without mentioning, if so, it’s largely because he reneged on anti-austerity promises.

Seven months after taking power in January, 2015 - after also reneging on the results of an anti-austerity referendum he called urging Greeks to support him in defying creditors - Tsipras sought and accepted a third bailout, this one for 86 billion euros ($97.33 billion) that came with more brutal measures he swore to reject but agreed to implement.

That came as he ousted Tsakalotos’ predecessor Yannis Varoufakis, who was so combative with the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) they wouldn’t work with him.

Speaking at the Sciences Po - Paris School of International Affairs, Tsakalotos, a Marxist economist forced into embarrassing surrenders to the Troika, said that SYRIZA expected it would be able to carve out a good deal “But we did not achieve this,” the business newspaper Naftemporiki reported.

He said the third bailout was a “compromise,” because Greece was promised debt relief in repayment terms for 326 billion euros ($368.94 billion) in return when the rescue packages ended on Aug. 20, 2018 after more than eight years.

He told audience members, the debt repayment agreement extended to Greece over the first 15 years was better than the one extended to Portugal, and possibly Italy but the lenders are now wary that Tsipras, on a path to lose big in elections this year, will try to wiggle out of reforms and 970 million euros ($1.097 billion) in profits that international banks made in profits that were due to returned are being held back because of that.

Tsakalotos said the lenders had locked arms against Tsipras, who promised to bring a Leftist revolution across Europe because they wanted to “defeat” him and prevent any idea of that spreading, and they succeeded.

Tsakalotos said another "strategic error" was an "over-estimation" of the Tsipras government's ability to deal with corruption and tax evasion in the country, which hasn’t happened.

Tsakalotos said that the rich in Greece have the best attorneys and accountants and find ways to avoid paying taxes and many hide their money in secret foreign accounts that the government promised to root out but hasn’t done so yet.

He also said the government was over-confident in its ability to locate money laundering and tax evasion.