25 January 2015

Bundesbank: No illusory promises

Good evening and welcome as we compile the immediate reactions to the Syriza victory from around Europe.  As expected, the mainstream German view has been clear – Greece must stick to the course of structural reforms in order to get its economy back on track.

Jens Weidmann, President of the German Bundesbank told German national broadcaster ARD, “I hope the new Greek government does not make illusory promises that the country cannot afford.” He reminded Greece that it is still dependent on the Troika aid programme, and that “naturally such a programme can only exist when the conditions are fulfilled.” He said that further debt relief for Greece would only provide a short respite – and that, above all, structural reforms are still needed.

Herbert Reul, Chairman of  the CDU/CSU group in the European Parliament said that another haircut for Greece was “unthinkable.” He warned that Greece must continue the course of reform if it doesn’t want to risk a departure from the Eurozone.

SYRIZA: Troika’s economic programme “dead”

Giannis Milios, Syriza’s economic and financial spokesman has proclaimed a “historic victory for the Greek people,” and “a historic moment for Europe.” When asked what the incumbent Finance Minister, Gikas Hardouvelis, should make of Monday’s meeting with the Eurogroup, Milios said he would only be able to “discuss technicalities” as the economic programme that the Greek Prime Minister Antonis Samaras had agreed with the Eurogroup is “now dead.”

Germany’s anti Euro AfD calls for Grexit

Speaking to German newswire DPA – Bernd Lucke, leader of Germany’s anti-Euro Alternative für Deutschland, has called for a Greek exit from the euro. Grexit is the only way to end the economic misery and mass unemployment in Greece, said Lucke. He added, “Syriza does not want to put the euro in question, but it wants to cancel [Greek] debt and other loans. That does not fit together.”

This was echoed by his Deputy, Beatrix von Storch, who commented this evening, “I am very pleased with the looming election results in Greece. Tsipras will force the so-called saviours of the euro to finally show their true colours: aid packages in exchange for reform or euro exit. Anything in between is an admission of failure by the euro-saviours.”

German Greens: Change bailout policy

Anton Hofreiter, the co-chair of the Greens’ parliamentary faction in the German Bundestag, will speak out in favour of a ‘socially just’ method to bailout highly indepted countries.

In an interview to be published in the Rheinische Post tomorrow, Hofreiter says, “Together with the new Greek government, the EU should – and the German government should –  look for ways to give people in Greece a new perspective.”

Samaras admits defeat: We have “prevented the worst”

The Greek Prime Minister Antonis Samaras has admitted defeat, congratulating Tsipras by phone.  He said, “we have prevented the worst. We can hand over a country that is on the right track, and more dynamic than before – that is fighting its way out of the crisis. I will give the country over to new hands, a country that is a member of the EU, and I hope the new government respects its agreements. I am at peace with myself.”

European Conservatives call on SYRIZA to honour austerity commitments

Manfred Weber, the German leader of the European People’s Party (EPP) in the European Parliament has been speaking in Brussels. He’s towing the German line, calling on SYRIZA to fulfill Greek austerity and reform commitments, only then, he says, “will Europe stand in solidarity with Greece.” Weber said that European taxpayers are not willing to pay for the campaign promises made by Tsipras.

European Social Democrats: Tsipras should build pro-European coalition

Quite a different tone being struck by the Gianni Pittella, the President of the European Parliament’s S&D grouping in Brussels tonight. “The Greeks have clearly decided to break with tough austerity,” said the Italian Social Democrat, he added that the renegotiation of Greek government debt should no longer be taboo, and that Tsipras should build a “pro-European coalition.”

Tsipras: The “Troika is history”

Tsipras has just been making his victory lap in Athens – we’ve live tweeted his comments, but essentially he promised the crowd that the era of austerity was over, but that his government would cooperate with its European partners. “We will not have the obligation to implement budgets that are unrealistic and impossible to achieve,” he said. “We will be realistic in what we forecast and what we implement…Catastrophe is not imminent.”

Le Pen: Monstrous democratic slap in the face of the EU

Jean-Marie Le Pen, father of Marine Le Pen – the leader of France’s far-right Front National party – said earlier today that a SYRIZA victory is a “disavowal” of the EU.  He said it would be a “repudiation of the European Union,” and that while Front National “does not share the SYRIZA programme,” its victory in Athens would be a part of the “political battle [against the EU].” Meanwhile his daughter, Marine Le Pen has welcomed on twitter the, “monstrous democratic slap, the people of Greece have administered to the European Union.”

Podemos: “Responsible policies – not subjugation of Merkel”

Spain’s left-wing anti-austerity Podemos party (which has rocked the polls since its foundation last spring), has welcomed the “new era” heralded in by the SYRIZA win, which it says is to follow in Spain. Speaking to Spanish daily El Pais, Pablo Iglesias the leader Podemos said:

The Greeks will finally have a Greek government, not a delegate of [German Chancellor] Angela Merkel.

Pablo Iglesias, Leader of Podemos

His deputy, Íñigo Errejón echoed his remarks, adding “the polices of unjust and ineffective cuts have been defeated by citizens – despite the campaign of fear. Blackmail has not succeeded in Greece… It will not triumph in Spain either.”Errejón added, “now responsible policies – not the subjugation of [German Chancellor Angela] Merkel,” can be enacted. Well, it’s certainly been an interesting evening – we’ll be back with more reaction and analysis in the morning – but in the meantime, make sure to read our snap analysis of what tonight’s events mean for the EU, Greece and the Eurozone.

26 January 2015

ECB not willing to take hit on Greek debt

We’re back today with some more reactions. Speaking to Handelsblatt’s Monday edition, ECB executive board member Benoit Coeure said:

The ECB cannot decide whether Greece needs debt relief. That will be a political decision. But is absolutely clear that we cannot agree to debt relief where Greek bonds held by the ECB are included. That would be impossible for legal reasons.

Benoit Coeure, Executive Board Member, European Central Bank

German Institute of Economic Research: “Bad news for Europe”

President of the the German Institute for Economic Research, Marcel Fratzcher has been weighing in, calling last night’s elections, “bad news for Europe and Greece,” and warned that SYRIZA’s stronger-than-expected showing will put a confident Tsipras on a collision course with the EU: “A conflict with European partners on economic policy is inevitable.”

Stubb: No room for radical course change

Speaking in Helsinki this morning, Alexander Stubb, the Prime Minister Finland said very limited concessions would be possible in negotiations with Tsipras: “We respect the result of the democratic vote. However, we must stick to the conditions of our pre-agreed deal. We must not forget that the whole Eurozone crisis began with infraction of the rules.”

German government urges Greece to honour committments

The ruling German coalition, Merkel’s CDU/CSU Union and their centre left coalition partners, the SPD, have been warning Greece that it cannot break the conditions of its bailout programme.

No surprise then to that Finance Minister Wolfgang Schäuble has told German tabloid Bild that “Every new government must comply with the contractual agreements of its predecessor.”

Thomas Opperman, the leader of the SPD’s Parliamentary group in the Bundestag, told Monday’s Rheinische Post, “The new Greek government is bound by agreements with the EU and the Troika. The new government has to tackle structural reforms bravely.”

No more burdens for Germany  Bavarian Finance Minister, Markus Söder of the CSU has urged Greece’s creditors’ to be unwavering in insisting on its implementation of reforms. “All further payouts depend on whether Athens complies to the necessary conditions,” he told Spiegel Online.

While he said a Grexit was “unimaginable,” he added that “It is clear that there must be no more [financial] burdens for Germany.” CSU MP Hans-Peter Friedrich, the deputy leader of the CDU/CSU faction in the Bundestag, warned:

The Greeks have the right to vote for whoever they want, but we have the right to no longer finance Greek debt.

Hans-Peter Friedrich, Deputy Leader, CSU/CSU faction in the Bundestag

Schulz: Tsipras will compromise

In an early morning interview with Deutschlandfunk radio, Martin Schulz, the President of the European Parliament has some interest comments to make, he said that that he called to congratulate Tsipras last night:

Schulz added:

Tsipras is a pragmatist who knows quite well that he must enter into compromise…I told him, I believe, we will find no majority for a haircut. I cannot imagine this.

Martin Schulz, President of the European Parliament