Greece increasingly isolated as it digs in heels over bailout

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Greece increasingly isolated as it digs in heels over bailout

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Greece is looking increasingly isolated as Athens insists it will not accept a continued bailout to avoid bankruptcy because that includes the hated austerity measures.

The Americans are the latest to cold shoulder the leftist-led government.

After a team of US treasury officials met Finance Minister Yanis Varoufakis, Washington said he should work cooperatively with Europe and the International Monetary Fund and push ahead with reforms.

Varoufakis will outline his plan to reform the economy and get Greece’s public finances back on track at a meeting of eurozone finance ministers next week.

He says no more international bailout programme: “The bailout means an ongoing recession and an unbearable and an unsustainable debt.”

Instead of an extension to the current bailout, he wants a “bridge agreement” before presenting a new proposal.

The other eurozone finance ministers are adamant that Greece must stick to its commitments – including austerity.

Eurozone officials say Greece is free to design its own reforms in line with Syriza’s campaign promises, as long as the result is in line with commitments to stronger public finances, debt repayment and reforms.

“The overall policy mix may reflect the priorities of Syriza. But it has to make sense financially,” one official told Reuters.

Portugal, which emerged from its own EU/IMF bailout last year, joined a chorus of countries insisting that Greece must stick to the austerity medicine as Lisbon had done and respect past agreements with EU partners.

Portuguese Economy Minister Antonio Pires de Lima rejected any kind of debt renegotiation for Greece, saying Athens must play by the rules established by euro members, especially considering his own country’s sacrifices.

He told the Reuters Euro Zone Summit that Lisbon had chosen a route “which was not the easiest one” to recover credibility and return to growth, and “that is also our attitude to the situation in other countries”.

There was more bad news for Greece late on Friday when the rating agency Standard & Poor’s lowered the country’s sovereign credit rating to B minus from B, sending its bonds further into junk territory.