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article imageGreece set for critical EU talks

By John Hadoulis, Ella Ide (AFP)     Feb 11, 2015 in World

Greece is to seek a cash lifeline at an emergency meeting of eurozone finance ministers Wednesday, as Athens struggles to persuade its EU creditors to renegotiate its massive bailout deal.

The talks come after Prime Minister Alexis Tsipras said he would not bow to German demands that his hard-left government first complete a pending loan agreement with the EU and the IMF.

"I want to repeat today, no matter how much (German Finance Minister Wolfgang) Schaeuble asks it, we are not going to ask to extend the bailout," Tsipras told lawmakers late Tuesday ahead of a confidence vote that the government won by 162 votes to 137.

The EU had earlier warned Greece's new leftist government to scale back its plans to revise the country's unpopular bailout if it wants to secure a six-and-a-half month lifeline that will enable it to meet pressing debt repayments in the coming months.

European Economic Affairs Commissioner Pierre Moscovici said the existing bailout deal was "the anchor" on which discussions should be held, while Schaeuble ruled out any renegotiation of the agreement.

Greek debt: countries most exposed
Greek debt: countries most exposed
S.Ramis/C.Mutto, AFP

But Tsipras insisted: "As long as we have the people on our side we cannot be blackmailed or intimidated by anyone."

He added: "I am confident that our European peers will be responsive to our proposals. I cannot believe there are powers in Europe that want to lead a people to humiliation, to take vengeance and punish, when they know this can only harm us all."

Speaking during a G20 meeting in Istanbul, Moscovici said the Greek people's desire for change should not be "brushed aside" but Athens should also keep in mind voters in other European countries.

Schaeuble was even more emphatic, telling reporters in Istanbul that "it's over" if Greece doesn't want the final tranche of its multi-billion euro aid programme on the current terms, according to Bloomberg.

Tsipras's legislative programme includes raising the minimum wage and ditching an unpopular property tax. While welcomed by ordinary Greeks, the proposals have raised eyebrows on the international stage.

- 'Non-negotiable' -

Greece was racing to fine-tune a 10-point plan aimed at persuading its international creditors to reluctantly rethink the terms of the 240 billion euro ($270 billion) bailout that Greece accepted during Europe's debt crisis.

Greece's Prime Minister Alexis Tsipras speaks during a parliamentary session ahead of a confide...
Greece's Prime Minister Alexis Tsipras speaks during a parliamentary session ahead of a confidence vote in the new government on February 10, 2015 in Athens
Louisa Gouliamaki, AFP/File

The emergency talks on Wednesday will see Greece plead its case for stop-gap financing with a view to clinching a reform deal that will not exacerbate poverty, to run from September 1.

According to a finance ministry source, the government is ready to cooperate on 70 percent of its bailout obligations but wants to overhaul the remaining 30 percent -- which it would replace with the 10-step plan.

It will offer a series of measures including lower budget surplus targets and cutting debt through a swap plan to replace its current EU-IMF bailout deal obligations.

The initiative was welcomed by the Greek market on Tuesday, which clawed back Monday's losses to rise more than 8.0 percent, while the benchmark 10-year bond also recovered ground.

The euro was up slightly against the dollar in Asian trade but analysts warned that the single currency could be in for a bumpy ride.

While a steady performance on the European markets also suggested the draft measures had soothed some jitters among investors, the continent's leaders were unlikely to be so easily swayed.

German Chancellor Angela Merkel has said she expects a "sustainable" finance plan that respects the "basic rules" of the bailout programme, while British PM David Cameron moved Monday to draw up contingency plans for a Greek exit from the eurozone.

People stand outside the Manpower Employment Organization in Athens on February 9  2015
People stand outside the Manpower Employment Organization in Athens on February 9, 2015
Louisa Gouliamaki, AFP/File

The government wants a bridging loan to buy time for negotiations without the austerity shackles.

A finance ministry source said such a deal could be reached to let both sides save face: "We call it a bridge. They can call it a technical extension."

Greece is under pressure to win approval for a new deal as quickly as possible because the European portion of the EU-IMF bailout is due to expire at the end of the month.

An accord is not expected before a further meeting of eurozone financial ministers next Monday at the earliest.

Greece's Finance Minister Yanis Varoufakis hailed the beginning of the talks as a watershed moment, saying "this is the first government that goes to the Eurogroup (of eurozone finance ministers) standing up, not bowed".

He added, however: "I will do everything humanly possible to avoid a rift, but we will not refuse to consider (the option)."

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