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UPDATE: Greek Finance Minister Conciliatory After Stinging ECB Credit Cut

Thu, 5th Feb 2015 14:26

Berlin (Alliance News) - Greek Finance Minister Yanis Varoufakis adopted a conciliatory tone towards Germany on Thursday, just hours after the European Central Bank (ECB) cut off Greek banks' access to cheap credit and roiled financial markets.

Greek stock markets dived after the eurozone's central bank said late Wednesday it would no longer accept Greek government bonds as collateral for lending money to commercial banks.

After talks with German Foreign Minister Wolfgang Schaeuble in Berlin, Varoufakis, who has been on a roadshow of European capitals this week, said he was not seeking to have any of Greece's sovereign debt wiped out but reiterated he wanted the terms of his country's bailout renegotiated.

Schaeuble, known for his hardline stance on eurozone fiscal issues, spoke of "agreeing to disagree" with Varoufakis.

Varoufakis declined to affirm even that, saying: "We didn't reach agreement. It was never on the cards that we would agree. We did not agree to disagree: We agreed to enter into negotiations."

But he avoided any specifics on what he wanted from Germany, the biggest European creditor to Greece's bailout.

Instead, Varoufakis merely called for "bridging" finance until a new agreement between Athens and its lenders could be negotiated with eurozone finance ministers. He said this was not in the remit of the ECB.

"The ECB and its president, quite rightly according to their own rulebook, demand that programme countries are in a programme. They are agnostic, due to their respect for central bank independence, about what that programme will be," he said.

Speaking to the media after talks that had been scheduled for just one hour ran 45 minutes longer, both men stressed that they wanted Greece to remain a member of the 19-nation eurozone.

Varoufakis said his new leftist government agreed with only "67%" of the reform programme agreed by Greece's previous centre-right government with the European Commission, the International Monetary Fund and the European Central Bank.

"Practically speaking, our proposal is that there should be a bridging programme between now and May," Varoufakis said.

He added, "You can expect from us readiness to implement microeconomic reforms that work."

Schaeuble renewed an old offer to send 500 advisers to help Greece build a fair tax administration, and praised the new government's plans to fight corruption and broaden the tax base by seeking out wealthy tax evaders, but criticized other leftist proposals.

"Some measures proposed by Greece do not go in the direction we approve," Schaeuble said, but added that he had to respect the mandate given by Greek voters to the new government in Athens.

"Our moral duty as Europeans is to understand each other, but it is also our moral duty to find solutions," the German said.

In a week-long campaign across Europe, Greece's newly elected leftist SYRIZA government has sought to win the backing of European leaders to ease the country's debt.

Greek Prime Minister Alexis Tsipras expressed optimism about finding a mutually acceptable solution with the EU after talks with the bloc's top officials in Brussels and a meeting in Paris with French President Francois Hollande.

The ECB move, effective February 11, will end a waiver that had allowed the use of Greek bonds as loan security.

dpa jbp sdl

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