The spokesman of the German chancellor, Angela Merkel, has denied a “private feud” has broken out between Berlin and Athens, as the radical Syriza government battles to avoid leaving the single currency – a risk euro-watchers have dubbed “Grexident”.
As Athens rushes to implement economic reforms and convince its creditors to extend emergency funding, Steffen Seibert, Merkel’s official spokesman, insisted Greece’s economic future should not be reduced to a face off between the two nations.
“I neither see a private feud nor do I view the whole issue of Greece and how it solves its problems as a bilateral German-Greek topic”, he said, reiterating that Merkel wants Greece to stay inside the single currency.
Tensions between Greece and Germany have been running high, after Syriza rekindled a row over war reparations to the Greek people earlier this week.
On Friday, France’s economics minister, Pierre Moscovici, said in a German magazine interview that a Greek exit from the euro would be a “catastrophe”, despite some analysts having sought to play down the consequences.
“All of us in Europe probably agree that a Grexit would be a catastrophe – for the Greek economy, but also for the eurozone as a whole,” he told Der Spiegel. “If one country leaves this union, the markets will immediately ask which country is next. And that could be the beginning of the end.”
Greece has been granted a four-month window to implement economic reforms after striking a last-minute deal with its creditors to extend its €240bn bailout.
Yanis Varoufakis, Syriza’s controversial finance minister, insisted his party would be able to satisfy the 20 February agreement – even if that means delaying some of its election promises. “We have a commitment, all of us, to reach an agreement by 20 April,” he told reporters on the sidelines of a conference in Italy.
“If this means that, for the next few months that we have negotiations, we suspend or we delay the implementation of our [election] promises, we should do precisely that in the context to build trust with our partners,” he said. However, he is likely to face pressure from within his own party to live up to the anti-austerity rhetoric of the election campaign.
Analysts at Fathom, a City consultancy company, said: “The chances that the beleaguered Greek government – which by promising to both keep the country in the euro area and abolish austerity has painted itself into a corner – will turn to the bolt-hole of a referendum are increasing. As such – and whatever the outcome of the negotiations – we expect volatility to increase across the board.”
Seibert’s intervention came after German finance minister, Wolfgang Schäuble, pointedly refused to rule out the risk that Syriza’s actions could lead to Greece leaving the european single currency, even if that is not the party’s deliberate aim.
“As the responsibility, the possibility to decide what happens, lies only in [the hands of] Greece, and as we do not know what those responsible in Greece are doing, we cannot rule it out,” he told Austrian television, when asked about the possibility of a “Grexident”.
Schäuble also reiterated that Greece would only get access to new funds if it fulfils its promises.
Syriza’s leader, Alexis Tsipras, who was in Brussels for talks with Jean-Claude Juncker, the European commission’s president, yesterday said his countrymen needed to hear an optimistic message from the rest of Europe, as well as a hardline insistence on financial reform.
“Now is the time to give a message of hope to the Greek people, not only implement, implement, implement and obligations, obligations, obligations.”
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