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War of words between Greece, EU

February 9, 2015

The European Commission president says Greeks shouldn't expect the EU to bow to Prime Minister Alexis Tsipras. Greece's confrontation with its foreign creditors appears to be growing.

Griechenland Parthenon Tempel in Athen 30.01.2015
Image: Reuters/Y. Behrakis

As the deadline for a deal to avoid a eurozone exit approaches, Greece remains deadlocked with EU partners after Alexis Tsipras (left in photo) pledged to restore wages, reinstate pensions and end mass layoffs - reversing austerity imposed in 2010 by the EU, International Monetary Fund and European Central Bank. On Sunday, Tsipras told parliament he would dismantle the "cruel" austerity, said he would not extend Greece's 240 billion-euro bailout, which expires at the end February, and vowed to seek reparations for World War II. His Syriza party took control of Greece's parliament after winning the January 25 legislative elections.

Vice-Chancellor Sigmar Gabriel rebuffed the call for reparations over the Nazi occupation of Greece, saying the countries had dealt with such matters in the negotiations that led to German unification in 1990. "The probability is zero," Gabriel said on Monday.

Plans to reverse austerity imposed by foreign lenders could set the country on a course for an exit from the eurozone, which sent Greek stocks tumbling Monday. Tsipras has said that he intends to honor the country's debts.

On Friday, the ratings agency Standard & Poor's had downgraded Greece's sovereign debt amid growing concern for the liquidity of the country's cash-starved banks. Greece has pledged to offer the European Union a new plan to claw out of the debt loaded onto the country by its foreign creditors and eagerly accepted by the previous government. Eurozone officials say they need to review the plan before they can go further.

"If they want our help, there needs to be a program," said German Finance Minister Wolfgang Schäuble, who had a friendly but testy meeting with Greece's new finance minister last week.

'The overall mood'

On Monday, British Prime Minister David Cameron chaired a special meeting with Treasury and Bank of England officials to plan for a possible Greek exit from the eurozone. Ahead of a meeting of G20 finance ministers in Istanbul, the United States and Canada have urged the EU and Greece to tone down the rhetoric over austerity and work for a compromise on the debt issue.

"Greece should not assume that the overall mood has so changed that the eurozone will adopt Tsipras' government program unconditionally," European Commission President Jean-Claude Juncker (right in photo) said on a visit to Germany Monday. He added that he did not expect a deal at an EU summit on Thursday or a eurozone finance ministers' meeting on Wednesday.

On Sunday, Finance Minister Yanis Varoufakis, who had found scant support for his plans to restructure the country's debt on a tour of EU capitals last week, angered some eurozone partners by saying that the currency used by 19 nations would ultimately collapse if Greece dropped out.

mkg/rc (Reuters, AFP, dpa, AP)