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06/12/2016

Juncker rejects Greek debt write-off

Euro & Finance

Juncker rejects Greek debt write-off

Jean-Claude Juncker has ruled out cancelling the Greek debt.

[European People's Party/Flickr]

With the uncertainty surrounding Greek debt preoccupying political leaders, the President of the European Commission has called on Athens to “respect Europe”. EurActiv France reports

The Syriza victory has brought the question of Greek to the centre of the European political debate.

Since his rise to power, Greek Prime Minister Alexis Tsipras has reaffirmed his opposition to the austerity measures imposed on Athens since 2010 by the Troika and stated his aim to renegotiate the national debt, which currently stands at 175% of GDP.

Out of the question

European leaders have been quick to respond to Tsipras’ rhetoric. In an interview with Le Figaro on 29 January, Jean-Claude Juncker said there was “no question of cancelling the Greek debt”.

“The other countries of the eurozone will not accept it,” the Commission President stressed.

“It is not true to say that Sunday’s elections hailed the beginning of a new era,” he added.  “We respect the popular vote in Greece, but Greece must also respect the views of the people and the elected representatives of the rest of Europe. Arrangements can be made, but they will not fundamentally change the system that is in place.”

Others, including the President of the European Parliament, Martin Schulz, have also spoken out. In an editorial entitled No Greek drama and no Greek drachma, published on LinkedIn, the German MEP wrote, “If the newly formed Syriza government will be a government of “no to everything”, then Tsipras’ momentum might be short-lived.”

Scheduled meetings

The Greek Premier has already scheduled a number of meetings with other European leaders, where the debt question is sure to take centre stage.

Paris announced a meeting between François Hollande and Alexis Tsipras before the European Council summit on 12 February. The French and Greek Finance Minister, Michel Sapin and Yanis Varoufakis, will meet in Paris on 2 February.

Sapin told MPs, “It’s okay to talk about Greek debt, to lighten its burden. It is not okay to cancel Greek debt, because that would mean passing on the burden to French taxpayers.” He added that France’s exposure to Greek debt totalled €42 billion.

Martin Schulz met Alexis Tsipras in Athens on 29 January, along with a number of other Greek politicians, including the former Prime Minister Antonis Samaras, and the leaders of the left wing parties Stavros Theodorakis (TO Potami) and Evangelos Venizelos (Pasok).

Minister for the Economy Emmanuel Macron said that the negotiations would be a chance for Europe to listen to the message from Greek voters, which have elected an anti-austerity government.

“We must step away from this ‘religious war’ between Europe’s North and South, where the former keep on blaming those in the South for the errors of the past and the indebtedness, and the latter say that all [the debt] is in the past and must be forgotten”.