After two weeks in power, the promises made by the prime minister does not depend on it and the largest latent risk for Greece is losing the use of the single currency in Europe.
Tsipras has toured Europe to gather support for his plan to reach a new agreement with European countries. Photo: AFP
The Greek prime minister took office two weeks, boosted by a surge of hope for change ago. But his promise to change the terms of the bailout that has kept the country afloat for nearly five years depends not only on him.
It is essential to agree with the other European countries that contributed to the loan of 240,000 million euros (272,000 million). For now, there have been very happy.
The big question is how many promises, if any, can keep Alexis Tsipras without risking a Greek exit from the single European currency, which could have disastrous consequences.
Tsipras and his finance minister, Yanis Varoufakis, have European tour last week to drum up support for his plan to reach a new agreement with European countries. His argument is that after nearly five years, it is clear that the current system reforms linked to austerity is not working, and the debt level is so high that can never be returned.
After the painful cuts budgets, structural reforms and tax increases, there has been some improvement and Greece recorded its first primary budget surplus excluding -equilibrium interest- payments last year. But despite the billions in cheap credit and debt removes most of the story in 2012, the Greek economy fell into a room and your debt is over 170% of its GDP.
Tsipras and Varoufakis received a warm welcome in some of their locations, but not in Germany, principal creditor and guardian of rescue. And Greece did not have much time. The current agreement expires at the end of the month, and the European Central Bank announced this month that as of February 11 will not accept Greek bonds to junk status as collateral for loans to banks.
Although banks can still access the Emergency Liquidity Fund, that system can not be used long time.
With the increasingly tight noose around the neck of Greece, the government has softened part of its rhetoric in his first week in office, when the comments on reversing commitments rescue sank the Athens Stock Exchange.
The requests for debt forgiveness have been changed by a proposed exchange debt rescue creditors linked to growth and “perpetual” bonds with interest bonds, which would have a similar effect without direct debt cancellation.
The government says it needs time to negotiate a new agreement acceptable to both parties, and want a “bridge program” to ensure sufficient cash to operate until then. Its major creditors, however, insist that Athens should stick to their commitments.
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