By Eleni Chrepa and Nikos Chrysoloras
(Bloomberg) — Prime Minister Alexis Tsipras struck a defiant tone over Greece’s bailout ahead of a meeting in Brussels with European leaders, a stance broadly supported by the cash-strapped country’s citizens.
“People have asked us to put an end to austerity and bailout agreements, to begin the process of reclaiming the dignity of the nation,” Tsipras said in a speech Wednesday in Athens. “We respond today, tomorrow and on Friday in parliament by building a wall of sovereignty and dignity.”
Nearly 80 percent of Greeks support Tsipras, according to a Public Issue poll published this week in pro-government newspaper Avgi. His handling of talks with creditors is viewed positively by 60 percent of citizens, according to the poll.
Tsipras is seeking a political deal at a European Union summit starting Thursday to unlock funds from the country’s 240 billion-euro ($254 billion) bailout package. Concern is growing among officials that the recalcitrance of his government may end up forcing Greece out of the euro, as the country refuses to take the action needed to trigger more financial support.
“Time is running out for Greece,” German Finance Minister Wolfgang Schaeuble said Wednesday in Berlin. “The worry is that it will become more difficult to reach solutions.”
International Monetary Fund officials told their euro-area colleagues Tuesday that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks.
Meaningless Threats
In a short and bad-tempered conference call, officials from the IMF, the European Central Bank and the European Commission complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private.
“Elected officials will negotiate with elected officials and technocrats will deal with technocrats,” Tsipras said in his speech to parliament. “For the past 50 days, we’ve been taking threats, which consistently prove to be meaningless, and only undermine those who make them.”
Tsipras is pinning his hopes for a breakthrough at a meeting with ECB President Mario Draghi, German Chancellor Angela Merkel, French President Francois Hollande and European Commission head Jean-Claude Juncker on the sidelines of the Brussels gathering.
Tsipras will also travel to Berlin next week for one-on-one talks with Merkel. The two nations have been locked in acrimonious exchanges over the continuation of Greece’s austerity program and whether Germany should pay reparations for the Nazi occupation of the country during World War II.
False Impression
“Many Greek people falsely believe that what is at stake is not Greece’s very problematic economic performance and the European Union’s mismanagement of the euro-zone crisis but a dispute between Greece and Germany,” said Dimitris Sotiropoulos, an associate professor of political science at the University of Athens.
Euro-region finance ministers are urging Greece to draw up a plan to fix the economy in exchange for emergency loans to keep the country afloat. As Tsipras challenges his creditors to blink first, his government’s money is running out, raising the prospect of a cash crunch as early as this month. The country faces more than 2 billion euros in debt payments Friday, and government salaries and pensions must be at the end of March.
“In the absence of new external support, the Greek authorities will likely continue to run up arrears to their suppliers and go into arrears on their payments to the IMF,” Malcolm Barr, a JPMorgan economist, wrote in a note to clients. “This would trigger renewed deposit outflows and the imposition of capital controls.”
Ending Humiliation
Tsipras railed against the country’s creditors, which he said used to come to Greece to inspect ministries and “humiliate” local officials with questioning, sometimes making elected leaders wait until the early hours of the morning. “We will not tolerate such phenomena, either in Greece, or abroad,” he told parliament Wednesday.
His messages strike a cord with citizens like Giannis Halkidis, who argue Tsipras, Finance Minister Yanis Varoufakis and others in the government must stand up for Greece.
“The situation will most likely turn out to be good for the country,” the 65-year-old pensioner said. “This is not bad for Greece, the country needs to exercise politics finally.”
Since the onset of the crisis, the Greek people have suffered a worse economic outcome than any country did in the 1930s, with a GDP contraction of 26 percent and more than a quarter of citizens out of work, Deputy Prime Minister Yannis Dragasakis wrote in the Financial Times this week.
“We will not back down from what we promised, and what society and the economy need, in order to breathe,” Tsipras said. “We are open to dialogue and suggestions from everywhere, inside and outside the country. But our popular mandate was explicit, and we are bound to honor it.”
–With assistance from Arne Delfs, Birgit Jennen and Brian Parkin in Berlin.
