Greece is heading into a game of chicken with its international creditors, and the rest of Europe. Prime Minister Alexis Tsipras just gave his first major speech since election, and he’s refusing to back down on basically any of his programme.
Here’s Gizem Kara at BNP Paribas on the speech:
The PM said his government would not seek an extension of the current programme, stating that it would be an “extension of mistakes and disaster”. He reiterated that Greece needs “fiscal space” to discuss a restructuring the country’s debt and a new agreement with its official creditors.
But he has the support of his country, according to a poll out Sunday. 72% of Greek voters are backing his confrontation with the “Troika” (the European Commission, ECB and IMF), according to the survey, conducted by the University of Macedonia for Greek TV channel Skai (responses were collected before Tsipras’ speech).
Significantly, that’s not just Syriza’s own supporters. More than 90% of those who voted for the radical left-wingers agree with the showdown, but so do 43% of the people who voted for New Democracy, the centre-right and pro-bailout party.
The Greek government has until 16 January to apply for an extension of the bailout, which Tsipras says it will not do. If it doesn’t, the funds run out at the end of the month, and after that the Treasury may only have weeks worth of cash left.
The bailout helps fund the Greek government, but to get the money it has to agree to strict austerity measures and privatisations. Tsipras wants a bridging loan for a few months to keep the government going while Greece’s debt situation is negotiated.
After Tsipras’ speech analysts are frantically upgrading their probabilities for a Greek exit (Grexit) from the euro, but for what it’s worth, the Skai poll suggests that would not be a popular move. 35.5% of respondents said it would cause them fear, and only 9.5% are looking forward to Grexit. The next big event is the meeting of eurozone finance ministers on 16 January.
Here’s Gizem Kara at BNP Paribas again:
Following the PM’s speech, the eyes will now be on the extraordinary Eurogroup meeting on Wednesday, where Greece’s finance minister is due to present the Greek government’s detailed proposal for a solution to its European counterparts. This meeting will be followed by the EU summit on Thursday and Eurogroup meeting on 16 February. The Eurogroup head Jeroen Dijsselbloem previously put 16 February as a deadline for Greece to ask for an “extension” of its programme.