FinMin Varoufakis, Smart Debt Engineering To Bail Greece

World » SOUTHEAST EUROPE | February 3, 2015, Tuesday // 11:50
Bulgaria: FinMin Varoufakis, Smart Debt Engineering To Bail Greece Greece Finance Minister Yanis Varoufakis Photo: BGNES

Greece's new Finance Minister Yanis Varoufakis, a left-wing academic economist, is on a tour around Europe in an attempt to rescue support for the new debt renegotiation measures proposed by SYRIZA.

The visits come as a surprise, since the Greek Finance Minister announced on Friday that he was not willing to talk over the debt situation with the Troika of international creditors.

The new government stated that the program concerning the debt worth EUR 240 B will be presented to European leaders by the end of February.

“What I’ll say to our partners is that we are putting together a combination of a primary budget surplus and a reform agenda,” Mr Varoufakis said in an interview for Financial Times. “I’ll say, ‘Help us to reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and become a deformed rather than a reformed Greece’.”

He further assured that people in SYRIZA ''are serious about reform, serious about being good Europeans and serious about listening.''

A statement was made that Greece would maintain its 1 to 1.5% surplus over GDP, even if that mean that the party will not be able to fulfill some of its promises to voters.

Varoufakis applied a different approach to the debt renegotiation situation called “smart debt engineering”, as opposed to the term ''haircut'', seen as inappropriate in a number of countries, including Germany.

The Greek Finance Minister stated that the reforms in the country will include higher taxation rates for rich Greeks, striking ''the cosy relationship between vested interests in the public sector and vested interests in the private sector that act as a drag on creativity, competitiveness, liberty and democracy '', and fighting the local bureaucracy.

Additionally, Greece hoped to secure a ''bridging program'' that would extend to June 1, during which the ECB would give the country some time to implement some of the proposed reforms. Meanwhile, the ECB obligation to keep the economy afloat through favorable terms on liquidity.

One investor present at a meeting with Varoufakis in London has said that he was optimistic because the new Greek government ''seemed to be pushing for a restructuring of the debt it owes to the Troika of state-level creditors".

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Tags: Syriza, Varoufakis, greece, troika, debt, renegotiation, smart debt engineering
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