Greece Looks To Renegotiate Bailout Terms
RENEE MONTAGNE, HOST:
Greece's new left-wing ruling party, Syriza, is pledging an end to the tough austerity measures that country has endured for the last five years. Those austerity measures were imposed in exchange for bailout loans to the bankrupt country, which the new prime minister, Alexis Tsipras, says he will renegotiate. European finance ministers are meeting in Brussels today to talk about what that could mean. For a sense of the stakes involved, we spoke to Tom Nuttall of The Economist. Good morning.
TOM NUTTALL: Good morning.
MONTAGNE: Now, what is - before we get into the details on the question of renegotiating these terms - what is the reaction of the 18 other nations in the eurozone to the election of this leftist leader in Greece?
NUTTALL: It's been clear for a while that Tsipras had a very good chance of taking office in Greece. So I don't think there were any major surprises after the election on Sunday, although perhaps the margin of victory was a little bit larger than some had expected. The biggest surprise I think came with the choice of coalition partner.
Now, Syriza is a party of the left, some people would say the hard left. It's gone into coalition with a small party called the Independent Greeks, who are a bunch of right-wing nationalists. They share very little in common other than a hatred of the troika, the officials who have imposed the conditions on Greece's bailout. The decision to go into coalition with that party seemed to send a clear signal that this government would perhaps take a rather harder line than some had expected it might do.
MONTAGNE: And that troika you speak of, that would be the EU, the IMF...
NUTTALL: And the ECB, the European Central Bank. Yes, these are the three institutions who have set the conditions for Greece to receive its bailout funds. Greece has endured great pain. Its GDP has gone down by 25 percent since the beginning of the crisis. Unemployment is at around 25 percent. And Mr. Tsipras, the new prime minister, has done a rather good job of channeling the anger and the discontent in Greece towards the troika.
MONTAGNE: I'm curious, can he actually change the bailout terms?
NUTTALL: That's a good question. In December, Greece's bailout was extended by two months. It expired at the end of February in just over a month. Now, that clearly doesn't leave very long for Mr. Tsipras to form a negotiating position because if that bailout expires without a further extension being agreed, then liquidity support to Greece's bank from the European Central Bank will be cut off. Now, that could precipitate a huge crisis. So now - well, if you speak to officials here in Brussels, then what they all say is that the ball is now in Greece's court. They're waiting for this new government to formulate a set of demands and requests that they will then be able to respond to. And the clock is ticking.
MONTAGNE: But one thing - this new prime minister of Greece, he has told his supporters he wants to stay in the eurozone. But when he's thinking about renegotiating the debt, what is he armed with? What can he threaten to do if he's not going to threaten to get out of the eurozone?
NUTTALL: The concern that a lot of eurozone officials have - and officials in creditor countries like Germany - is that if in the course of negotiations with Syriza, they start to go soft, they start to go wobbly, they start to give in to some demands, then parties, you know - governments in places like Spain may start to say, well, hold on, if Greece is starting to get a good deal, then why don't we get a good deal as well? And all of a sudden, you have a different sort of contagion spreading from Greece to other parts of the continent. That is the new concern that people here have.
MONTAGNE: Tom Nuttall writes the "Charlemagne" column for The Economist magazine. Thank you very much for joining us.
NUTTALL: It was my pleasure. Transcript provided by NPR, Copyright NPR.