The new leftwing Greek government and the man overseeing its bailout operation – the eurozone’s finance chief Jeroen Dijsselbloem – met for the first time in Athens on Friday, and it was a difficult encounter.
Having paid his respects to Prime Minister Alexis Tsipras, Dijsselbloem entered the lion’s den – the Finance Ministry to confront his nemesis.
There, during a one hour meeting, the Greek Finance Minister Yanis Varoufakis told the Eurogroup President in no uncertain terms the country is done cooperating with its bailout lenders, the so-called troika of the International Monetary Fund, the European Commission and the European Central Bank.
Afterwards at a tense news conference Dijsselbloem tried reasoning:
He said: “It is of the utmost importance that Greece remains on a path of recovery. This requires commitments to reform process and to fiscal sustainability. Taking unilateral steps or ignoring previous arrangements is not the way forward.”
Varoufakis was having none of that. He accused the troika of trying “to implement an anti-European programme,” adding “We see no purpose in cooperating with this tripartite committee that the European Parliament has criticised as being built on a rotten structure.”
Varoufakis said he had assured Dijsselbloem that Athens planned to implement reforms to make the economy more competitive and have balanced budgets but that it would not accept a “self-fed crisis” of deflation and non-viable debt.
The news conference ended with an awkward handshake, after which Dijsselbloem headed back to Brussels, not looking at all happy and with apparently no idea what the Greeks will do next to find money to cover around 10 billion euros in debt repayments this summer.
In Athens euronews correspondent Symela Touchtidou concluded: “Since 2010 Greece has received dozens of visits from the troika, as the Greek bailout programme was implemented. Now the new finance minister has firmly declared that those visits belong to the past.”
Investors were not comforted and the main Athens stock market ended the day down 1.59 percent.
The cost of borrowing for the Greek government rose again; bonds that are due to mature in three year time saw their yields – that is the amount of interest that has to be paid on them – soared to 19 percent before easing to 18.77 percent.