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Greek leader to reject EU’s austerity, lay out leftist program

A second part of the speech will touch on his government’s social and fiscal policy over the longer term

Published: Updated:

New Greek Prime Minister Alexis Tsipras will lay out his radical left-wing government’s policies in a speech later on Sunday, firmly rejecting any more austerity forced on his debt-strapped country by its euro zone partners.

In his first major speech to parliament as premier, Tsipras is expected to say that Greece wants no more bailout money, plans to renegotiate its debt deal and wants a “bridge agreement” to tide the country over until a new pact is sealed.

A second part of the speech will touch on his government’s social and fiscal policy over the longer term and is likely to repeat pledges for such things as a rise in the minimum wage and free electricity for poorer Greeks.

The speech will be closely watched by European Union leaders who to date have shown scant willingness to meet Tsipras’s demands, fearing a wholesale backtracking on the fiscal and economic reforms international lenders have demanded in exchange for some 240 billion euros worth of assistance.

British finance minister George Osborne, speaking from outside the euro zone, has said the standoff is one of the major risks facing the global economy.

Greece’s current bailout expires on Feb. 28 and most lenders want Athens to apply for an extension, including the commitment to reforms. Greece has ruled that out.

Tsipras will meet EU leaders at a summit in Brussels on Thursday. Finance Minister Yanis Varoufakis will meet euro zone counterparts the day before.

A Greek official said EU leaders should not expect Tsipras, who rode to power on a groundswell of anger over EU-imposed austerity that has helped to impoverish many Greeks, to say one thing at home and another to them.

“What the prime minister will say in parliament will be ... the same things that we will say in Brussels,” said the official, who asked not to be named. “He will be very specific.”

Seeking different relief

Greeks have been severely hit by the austerity imposed on them by the “troika” of European Central Bank, International Monetary Fund and European Commission lenders. The country is only just coming out of years of economic depression, but roughly one in four Greeks are unemployed.

“It’s not just that this restructuring is possible, it’s absolutely necessary,” Matthieu Pigasse, whose Paris-based group at investment bank Lazard is advising Greece, said on French television last week.

“You have a country, Greece, that is today facing a totally untenable situation. It is incapable of facing its debt. Not just incapable of paying it in capital and interest but potentially incapable of facing its current expenses.”

Over the past week, Greek officials have laid out what they see as a transitional plan to keep finances flowing over the next few months while they renegotiate their debt agreement.

They will first reject a 7.2 billion euro bailout tranche that has been due pending a suspended review.

Instead, they want the right to issue more short-term debt beyond a current 15 billion euro threshold. They also want 1.9 billion euros in profits from Greek bonds held by the European Central Bank and other euro zone authorities, something that was agreed previously.

With that as a bridge, Greek officials would then try to renegotiate payment of Greek sovereign bond debt, perhaps by extending payments, only paying interest and getting some respite on the budget surplus it is expected to run.

As for the government’s policy, some of which is deemed in European capitals irresponsible or too costly, a government official suggested that not everything had to happen at once.

“The pace of the implementation of our promises is ‘within four years’,” the official said.