Sunday, February 1, 2015

Greece insists it will pay back creditors as it hires debt advisers Lazard

By Mehreen Khan 31 January 2015

Prime Minister Tsipras says a debt deal is imminent and there is "no way" Greece will not fulfil obligations to the Troika

Alexis Tsipras waves to his supporters outside Athens University Headquarters

Alexis Tsipras says ending austerity in Greece does not mean his government will renege on its debt obligations Photo: Petros Giannakouris/AP

Greece's new prime minister has insisted his country will fulfil all of its loan obligations as it appointed investment bank Lazard ahead of crunch talks with the Troika.

In a statement designed to calm tensions between Greece and its creditors, Alexis Tsipras said: "I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole."

"No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt" he added.

The Syriza leader also spoke to European Central Bank president Mario Draghi on Friday to provide reassurances that his government was seeking a mutually beneficial arrangement on its bailout arrangements.

Mr Tsipras said his commitment to end austerity and kick-start growth in the country, "in no way entails that we will not fulfil our loan obligations to the ECB or the IMF."

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His comments came after German Chancellor Angela Merkel ruled out the possibility of debt forgiveness for Greece's new government, insisting that the indebted country should abide by the terms of its bailout arrangement.

Speaking to the Hamburger Abendblatt newspaper in Germany, Ms Merkel said she did "not envisage fresh debt cancellation" for Greece.

"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt."

Greece's Finance Ministry also confirmed it had moved to hire investment bank Lazard to advice on matters of "debt and fiscal management".

Lazard also acted as an adviser to Greece in 2012 when it underwent one of the biggest private debt restructurings in history and sought to write down billions of euros.

Europe's €240bn bailout program for Greece expires at the end of February and a failure to renew it could leave Athens unable to meet its financing needs.

Last month, Ukraine said it had also hired the bank to assist on negotiations with its foreign creditors about a possible debt restructuring.

The new Syriza-led government has demanded some form debt write-off on the country's €317bn liabilities, two-thirds of which are owed to official creditors in the form of the EU and the IMF.

The stand-off between Greece and its partners escalated on Friday after Yanis Varoufakis, the country's new finance minister, ruled out any cooperation with the country's Troika of lenders, calling them a “rottenly constructed committee."

Anti-austerity Syrzia campaigned on the platform of staying within the euro and agreeing better terms on which it can service its debt.

Chancellor Merkel said Europe would only stand by Greece should it continue to meet the conditions of its bailout.

"The aim of our policy was and is that Greece remains permanently part of the euro community," said Ms Merkel.

"Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis, if these countries carry out reforms and cost-saving measures."

At over 175pc of its national output, Greece's debt mountain is the highest in the Eurozone.


Greece insists it will pay back creditors as it hires debt advisers Lazard - Telegraph