EU, Germany warn Greece over debt reduction ambitions

The European Union and Germany warned Greece’s new left-wing government Thursday that there was little support for a reduction in its massive debts, before it holds the first talks with its eurozone partners.

Prime Minister Alexis Tsipras will on Friday meet Jeroen Dijsselbloem, the current head of the eurozone group of finance ministers, which Athens said would mark the start of Greece’s negotiations on revising the conditions of its bailout deal.

Ahead of the meeting, Greek bank stocks rebounded Thursday after plunging the day before on concerns about the dramatic first moves of Tsipras’s new administration.

The government has begun to roll back years of austerity measures demanded by the EU and the International Monetary Fund in return for a 240-billion-euro ($269 billion) bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the debt.

But European Commission chief Jean-Claude Juncker said a reduction of the 315 billion euro debt linked to the bailout “is not on the radar.”

“I don’t think there’s a majority in the Eurogroup… for a reduction of the debt,” he told Germany’s ARD television, referring to the eurozones finance ministers.

Sigmar Gabriel, Germany’s vice-chancellor and also its economy minister, said he expected Greece to “stick to its commitments” for fiscal and economic reform made in exchange for the package.

He was critical of a decision by the new government to scrap the privatization of major ports and power companies, decisions which also draw a rebuke from China.

“All citizens of Europe must be able to expect that changes in Greek policy will not be made to their detriment,” Gabriel told parliament. [AFP]