Greek Finance Minister Determined to Cut Debt

Greek Finance Minister Yanis Varoufakis stood firm Monday on his government’s commitment to renegotiate the country's debt with European partners.

Varoufakis and Prime Minister Alexis Tsipras are touring European capitals this week in a diplomatic bid to rework Greece's bailout accord with the European Union, the European Central Bank and the International Monetary Fund.

It has so far met a tough line from European partners, above all Germany, whose Finance Minister Wolfgang Schaeuble told Reuters in an interview Monday that Berlin would not accept any unilateral changes to Greece's debt program.

Although certain media outlets have attempted to portray the Greek government's position as unfeasible or confrontational, Varoufakis contends that this is not the case.

"My message to our German friends and, indeed, to all Europeans, is that no hand will be overplayed, because we're not entering this in a confrontational manner," he said.

"This is what journalists love to portray the situation as, as a kind of Wild West showdown. This is not it. What we have here is different European governments with a common objective and that is to strike a mutually beneficial deal, one that minimizes the cost of this crisis for the average European, not for the Greeks, not for the Germans, but thinking from a European perspective," he added.

Greece, unable to borrow on the markets and facing pressure to extend the current support agreement when it expires on Feb. 28, is looking for a bridging deal to provide breathing space to propose a new debt arrangement.

Varoufakis began over the weekend in France, where the centre-left government in Paris is thought to be more sympathetic than others to the case for relaxing lending conditions.

French Finance Minister Michel Sapin said after meeting Varoufakis that Athens could not expect a straight debt write-off, but left the door open to other options that include giving Athens more time for repayment.

Varoufakis's next stop was in London, where he was due to meet about 100 banks and financial institutions. An organizer said one of the meetings had to be moved from a fancy London members' club, because Varoufakis wouldn't wear a tie.

After the meeting, Britain's finance minister, George Osborne, called the disagreement between Greece and the euro zone "the greatest risk to the global economy.”

Varoufakis is insistent that the current arrangement — which essentially commits Greece to austerity for decades — is unacceptable and that they have a mandate from the Greek people to change it. "The government and the finance minister will not back down, irrespective of how grieved some people are by our determination,” said Varoufakis in a statement.

Greece's European partners are worried that cutting its debt will set a dangerous precedent for other European countries also facing large debt loads. However, economists have suggested that its debt is simply too big to ever be repaid.  

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