Sapin open to debt dialogue with Greece

18/1/2015

By Ben McLannahan and Robin Harding

French finance minister Michel Sapin has called on eurozone nations to respect the outcome of next Sunday’s election in Greece, saying that the EU should be ready to negotiate with the country’s new leaders on restructuring its huge public debts or extending the terms of its bailout.

In an interview with the FT in Tokyo, where he was on the last leg of an Asian tour, Mr Sapin said that he did not want to second-guess the result of Sunday’s contest, which polls suggest could be won by Syriza, a radical leftwing party that has put debt relief at the heart of its campaign.

“Whatever the result of the election will be, it is absolutely fair and legitimate that discussions should take place between the EU and the new Greek government,” he said. “What we would think is extremely important is the stability of the eurozone.”

The comments come amid tensions among eurozone partners over how to respond to a likely victory for Syriza. Alexis Tsipras, the party’s leader, has vowed to end fiscal austerity and renegotiate Greece’s government debt if his party comes to power.

Last week Alex Stubb, the prime minister of Finland, told the FT that he would give a “resounding no” to any move to forgive Greek debts and warned that a new government in Athens would have to stick to the terms of the original €172bn rescue from the EU, due to expire next month.

Wolfgang Schäuble, the German finance minister, said in a recent interview with Der Spiegel magazine that any new Greek government after the January 25 election would not be offered debt relief.

The remarks from Mr Sapin suggest that France is prepared to take a more conciliatory approach.

If the Greek bailout was allowed to expire at the end of February, Athens would be left without a financial backstop from the EU at a time of heightened market worries over the eurozone. Greece would still have access to an International Monetary Fund programme, but strains between Athens and the fund have also grown.

“All the possible issues will have to be dealt with within these discussions between the new Greek government and the EU,” said Mr Sapin. “Of course Greece will have to carry out more reforms, but they have already done a lot of reforms, and we will have to show solidarity within the eurozone.”

Mr Sapin dismissed the prospect of Greece leaving the currency bloc, noting that none of the political parties are calling for an exit.

Commenting on the hard line adopted by the Finns, Mr Sapin said that “the only reasonable thing is to respect democracy in other countries, and to respect democracy in your own country as well.”

On Monday Mr Sapin is due to meet his Japanese counterpart, Taro Aso, and central bank governor Haruhiko Kuroda. They are expected to discuss ways to cut off global flows of funds to terrorists in the wake of the attacks by Islamist extremists on the offices of the satirical magazine Charlie Hebdo in Paris earlier this month.

Mr Sapin suggested that the mood of national unity in the wake of the shootings, in which 17 people were killed, could boost support for structural reforms in the world’s eighth-largest economy.

His Socialist party has tabled a bill proposing a series of growth-focused laws presented by Emmanuel Macron, the economy minister, which includes measures such as the extension of Sunday shopping laws and the sale of state-owned assets that have drawn criticism including from senior socialist figures.

The government sees passage of the bill — which Mr Sapin likened to the “third arrow” of the Abenomics agenda pursued by Japan’s prime minister, Shinzo Abe — as a way of demonstrating to Brussels and Berlin his government’s commitment to boosting competitiveness.

“It is true that the current context might help, and we think everyone has to give for the best. I’m sure [the Macron bill] will be adopted,” he said.

Πηγή

Σχετική δημοσίευση εδώ.