Greeks take Europe to the brink as showdown looms over bailout

Greek Prime Minister Alexis Tsipras comfortably won a confidence vote on his plan to cancel a deeply unpopular bailout programme and challenge European leaders as both sides prepare for a showdown at meetings in Brussels this week.

In a rousing speech to parliament, Tsipras hailed the decisive role "little Greece" was playing in reshaping Europe and promised Athens would not cave in to demands it extend its international bailout "no matter how much" German Finance Minister Wolfang Schaeuble asked for it.

"We are not negotiating the bailout; it was cancelled by its own failure," he told parliament before winning the vote with the backing of 162 lawmakers in the 300-seat chamber.

"I want to assure you that there is no going back. Greece cannot return to the era of bailouts."

That came after Schaeuble said that if Greece did not want a new aid programme, "then that's it", adding to a chorus of warnings from European policymakers urging Athens to seek an extension to the programme when it expires at the end of the month.

Tsipras – whose tough stance has the backing of 75 per cent of Greeks according to an opinion poll – said he was confident the two sides would reach an agreement. But there was little sign of progress in bridging differences ahead of crunch meetings of euro zone finance ministers on Wednesday and EU leaders on Thursday when assistance to Athens beyond February will be discussed.

Hours before the vote, the European Commission said President Jean-Claude Juncker and Tsipras spoke on the phone in a "positive spirit of cooperation", seeking to calm rising alarm in Western capitals at the risk of a Greek exit from the single currency area that could trigger wider financial instability.

However, Greek Finance Minister Yanis Varoufakis refused to rule out a standoff with his country's creditors. "We're not seeking a clash. We will do everything to avoid it," he told parliament, but added: "If you're not willing to even consider a clash, you're not negotiating."

Schaeuble and a Commission spokeswoman dismissed media reports of an EU compromise plan that lifted Greek and European financial markets and the euro on Tuesday.

"There is no Juncker plan at this stage, of no matter how many points. There is no such plan at this stage," Commission spokeswoman Mina Andreeva told journalists in Brussels.

"That being said, of course very intense contacts are going on between the president, prime minister Tsipras and other players involved in the euro zone and beyond, but up to this point all these contacts have not been very fruitful."

'PLAN B'

Defence Minister Panos Kammenos said Greece could look to Russia or China if it failed to get a new debt deal with the euro zone.

"What we want is a deal," the hardline nationalist said on television. "But if there is no deal ... and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source.

"It could be the United States at best, it could be Russia, it could be China or other countries," Kammenos added.

Underlining the fragile relations with some of Europe's most powerful countries, Greek Foreign Minister Nikos Kotzias took his government's claim for World War Two reparations directly to Berlin on Tuesday – and received a clear rebuke.

German Foreign Minister Frank-Walter Steinmeier said Berlin was fully aware of its political and moral responsibility for the "terrible events" in Greece during the Nazi occupation from 1941 to 1944. "Still, we are firmly convinced that all reparations issues, including forced loans, are judicially settled once-and-for-all," he added.

Another minister announced in parliament plans to halt a Canadian-run gold mine project and cancel a development scheme at Athens' former airport, part of a wider roll-back of privatisations that were agreed as a condition of the bailout.

Varoufakis has proposed a six-month transition during which Greece wants to be allowed to issue more short-term treasury bills, run a smaller budget surplus and receive European Central Bank profits on Greek bond holdings.

He said on Monday Athens wants to scrap about 30 per cent of the current bailout's conditions, to be replaced by measures approved by the Organisation for Economic Cooperation and Development, and implement 70 per cent of the recommendations.

Greece would use the interim period to negotiate a rescheduling of its official debt, swapping euro zone government loans for GDP-linked bonds and ECB-held debt for interest-bearing perpetual bonds, he said.

EU officials say the proposals were unlikely to be acceptable in anything like their current form, but they might contain the seeds of a compromise under which debt repayments would be extended further into the distant future, with a longer grace period before interest payments fall due.

Euro zone creditors led by Germany, the bloc's main paymaster, first want to see firm commitments to an economic reform programme under outside supervision incorporating policies agreed by the previous conservative-led government.

related articles
Greece rejects austerity in victory for Syriza
Greece rejects austerity in victory for Syriza

Crushing bailout terms have been rejected as the left-wing party triumphs.

Greece\'s first secular inauguration sees new leader pledge to end austerity
Greece's first secular inauguration sees new leader pledge to end austerity

Alexis Tsipras rejected the traditional Church blessing as he started work.

Tens of thousand rally for Spain's Podemos before elections

Tens of thousands marched in Madrid on Saturday in the biggest show of support yet for anti-austerity party Podemos.

Greece drops calls for debt write-off, denies finance \'showdown\' with Brussels
Greece drops calls for debt write-off, denies finance 'showdown' with Brussels

Finance minister Yanis Varoufakis is seeking better terms that will allow growth.

News
Campaign aims to mobilise 500,000 Christians for Christmas outreach
Campaign aims to mobilise 500,000 Christians for Christmas outreach

Shine Your Light is aiming to mobilise half a million Christians to share the gospel with five million people across the UK this Christmas, with more than 2,000 churches already signed up, organisers say.

The Church of England should repent for previous calls to ban 'conversion therapy'
The Church of England should repent for previous calls to ban 'conversion therapy'

The Church of England's uneasiness about the government's ‘conversion practices’ bill is a perfect lesson in the old adage, 'be careful what you wish for,' writes Dr Martin Davie.

Leaked Home Office report links 'Christian extremism' to traditionalist beliefs and immigration concerns
Leaked Home Office report links 'Christian extremism' to traditionalist beliefs and immigration concerns

An internal Home Office report lists concerns about immigration, multiculturalism and changing social values among the characteristics associated with what it calls "Christian extremism", it has been reported.

Tearfund calls for COP31 funding to reach farmers struggling with climate change and food insecurity
Tearfund calls for COP31 funding to reach farmers struggling with climate change and food insecurity

Tearfund warns that worsening climate conditions are threatening food production and pushing more people towards hunger.