'Euro zone should ease stance for Greek deal'

Debt-laden Greece and EU paymaster Germany struck hardline postures ahead of a crucial meeting of euro zone finance ministers on Monday on the future of an unpopular international bailout for Athens, but France called for a compromise.

German Finance Minister Wolfgang Schaeuble maintained a typically tough line, telling German radio Greece had lived beyond its means for a long time and there was no appetite in Europe for giving it any more money without guarantees. French Finance Minister Michel Sapin hinted at a slight easing of euro zone opposition to Greek requests for an end to austerity and a new debt deal, saying Europe must respect the political change in Athens.

EU Economics Commissioner Pierre Moscovici declined to discuss what might happen if they failed to reach a deal. The “only aim”, he told reporters on arrival for the meeting, was to keep Greece in the euro zone, fully respecting its commitments to creditors while “taking into account the programme that the Greek voters chose”. Radical leftist Greek Prime Minister Alexis Tsipras’s government was elected last month on a pledge to scrap the bailout, reverse austerity measures and get rid of supervision by the hated “troika” of the European Commission, the European Central Bank and the IMF.

Greece’s euro zone partners to date have shown little desire to cut Athens any slack on the austerity demanded in return for some 240 billion euros ($274 billion) in financial assistance. If Monday’s meeting ends in a breakdown, Greece could be headed for a credit crunch that could force it out of the euro zone. Progress, however, could mean further negotiations, perhaps later in the week.

Greek Finance Minister Yanis Varoufakis said in a New York Times article his country would no longer be treated as a “debt colony” subjected to “the greatest austerity for the most depressed economy”. “The lines that we have presented as red will not be crossed,” he said.

“Our government is not asking our partners for a way out of repaying our debts. We are asking for a few months of financial stability that will allow us to embark upon the task of reforms that the broad Greek population can own and support, so we can bring back growth and end our inability to pay our dues.”

Last effort

Tsipras had a late telephone call with European Commission President Jean-Claude Juncker, whose office said the EU’s chief executive was “making a last effort in an extremely difficult situation”.

Sapin took a much softer line than has been heard from the euro zone recently, saying there was “fortunately” some chance of a deal. He appeared to be positioning France as a compromise broker.

Germany had a point in insisting that Greece stick to commitments made to its creditors, Sapin said, but Athens was justified in saying the Greek people had mandated the new government to pursue a different policy. “Greece must respect European rules... be we must respect the Greek people’s vote. There is a new policy and we must help Greece put this policy in place,” he said.