NEWS

As European officials hint at ‘plan B,’ pressure grows on gov’t to compromise

As a deal between Greece and its creditors appears far from imminent, concerns mounted over the weekend over the country’s finances and its prospects within the eurozone as a US Federal Reserve report indicated that the risk of a possible Greek exit from the common currency area has grown and is leading Europe into uncharted waters.

In comments over the weekend, Finance Minister Yanis Varoufakis said he was confident that Greece and its creditors were “close to an agreement” despite the extremely negative climate of last Friday’s Eurogroup summit in Riga. However, he noted in comments to Euronews that Greece would not sign anything for the sake of securing a deal but an agreement that would secure growth for Greece. Questioned about reports that a eurozone peer had proposed a “plan B” in the event that talks collapse, Varoufakis said an official had mentioned it, apparently in anger, and that he had responded that “there cannot be any plan B” and that any reference to such a prospect is “profoundly anti-European.” He acknowledged the country’s liquidity problems but said this situation was “an investment for a better future for Greece and Europe.”

His comments came as Germany’s Finance Minister Wolfgang Schaeuble suggested that Berlin was preparing for a possible Greek default, drawing a parallel with secret German reunification plans in 1989. “If back then, a minister in charge… had said we have a plan for reunification, then the whole world probably would have said, ‘The Germans have gone completely crazy.’” He said one only need use one’s imagination to imagine what could happen in the event of a non-deal with Greece, adding however, “You shouldn’t ask responsible politicians about alternatives.”

Meanwhile in Athens, fears about the possibility of a Greek default appeared to have peaked. Greece’s President Prokopis Pavlopoulos said he would do everything to keep Greece in Europe. “My role, my competencies and chiefly the popular mandate of the last elections oblige me to do everything within my authority, even pushing the limits of my authority, to ensure that the course of Greece within Europe and the eurozone is not upset,” he said. His comments came during a meeting with the leader of the centrist Potami party, Stavros Theodorakis, who asked Pavlopoulos to call a meeting of party leaders to discuss the progress of negotiations between Greece and its creditors even though such an initiative can only be taken by Prime Minister Alexis Tsipras.

Former Premier Antonis Samaras, addressing a party rally in the western port of Patra on Saturday, referred to suggestions by many government officials that new elections or a referendum could be called in the event of a deadlock. He said this would mark the failure of the SYRIZA-led government and would put the country on to the road toward the drachma. Describing the government as “sorcerers’ apprentices,” Samaras said they had managed to “bring back the Grexit specter within three months.”

An internal report by the US Federal Reserve, which was circulated to Fed staff ahead of the International Monetary Fund’s recent spring summit and which Kathimerini has seen, underscored that the risk of a Greek exit from the eurozone has increased, plunging the eurozone into uncertainty despite the relative resilience of global markets. The report concluded that the imposition of capital controls in Greece could lead to default and a eurozone exit if the European Central Bank stops funding Greek banks, the IMF refuses to offer Athens a grace period for repaying its debts, and Greece and its creditors fail to reach a deal to unlock further rescue funding.