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Greece threatens early elections

March 8, 2015

Athens could call for a referendum or early elections if the eurozone rejects its debt plans, Greece's finance minister has said. The present government won elections on promises of renegotiating the EU bailout program.

Griechenland Yanis Varoufakis
Image: Emmanuel Dunand/AFP/Getty Images

Greece's Finance Minister Yanis Varoufakis said his government was willing to hold a referendum or even early elections if Eurogroup ministers reject debt and growth plans.

Varoufakis' statements came shortly before finance ministers of the eurozone countries were due to meet on Monday for crucial talks on Athens' list of reforms, which the EU received last week.

Warning of "problems" that could come up in Monday's talks, Varoufakis told Italian newspaper Corriere della Sera in an interview that his country could "go back to elections. Call a referendum…But as my prime minister told me, we are not glued to our seats yet."

Greece's government under Prime Minister Alexis Tsipras reached an agreement with the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF) last month, which gave Athens until the end of April to specify the reforms it would undertake in exchange for further aid.

Varoufakis denounced reports that he was calling for a vote on remaining in the euro, claiming they were a part of "willful attempts to undermine the good course" of the Greek government's discussions with its partners.

In his interview with the Italian daily, Varoufakis said eurozone partners had not yet responded to Greece's proposals to replace its current debt with bonds linked to nominal growth.

"I'd like for Europe to understand that this would be a way of paying back more money, not less." The finance minister said his government was fighting the "establishment that said it was saving Greece while it put everything on the backs of the poor." Varoufakis said his country did not need a new loan to pay its bills.

More loans to Greece 'illegal'

However, the EU and IMF have refused to release aid before Athens completes promised reforms. The country faces a decline in tax revenues, and uncertainty over its financial position has been growing. EU leaders want to avoid another crisis like the one in 2011, when Greece's financial status nearly plunged the eurozone into economic problems until a bailout agreement was reached.

ECB director Benoit Coeure also expressed his institution's tough stance ahead of Monday's talks. "The ECB cannot finance the Greek government. We're not allowed to. That is illegal," Coeure told German weekly Frankfurter Allgemeine Sonntagszeitung.

But European Commission head Jean-Claude Juncker took a more conciliatory approach. "We must be sure that the situation does not continue to deteriorate in Greece," Juncker told German weekly Die Welt.

Monday's talks in Brussels would determine how EU countries would evaluate Athens' plans to streamline bureaucracy, raise revenue from online gambling and hire tax sleuths to clamp down on tax evasion.

mg/rc (AFP, Reuters)