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Athens rejects troika auditors, more money

January 31, 2015

Less than a week into its first term, Greece's new government is taking aggressive steps to keep anti-austerity campaign promises. Athens has refused entry to "troika" auditors as part of its latest move.

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Giannis Varoufakis
Image: Reuters/A. Konstantinidis

Into the early hours of Saturday morning, Greek Prime Minister Alexis Tsipras' newly formed coalition government stole headlines after his finance minister announced that Athens would no longer cooperate with its auditors from the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), also known as the "troika."

Greek Finance Minister Yanis Varoufakis (pictured right) further rejected the next and final tranche, worth 7.2 billion euros ($8.12 billion), of Greece's international bailout, which began in 2010 and is due to end in February.

"This government was elected on the basis of analytically questioning the very logic of the program now being applied," Varoufakis told reporters at a press conference alongside Eurogroup chief Jeroen Dijsselbloem on Friday evening in Athens.

"Our first action as a government will not be … a request to extend [the bailout]," he added.

The Greek finance minister also said that while Greece would not grant auditors entry, it would continue to work with lenders in the hopes of renegotiating the terms of its 240-billion-euro bailout.

Discord in the eurozone pushed the value of the euro down one more cent on Friday to $1.12. The Athens Stock Exchange closed down 1.6 percent.

Eurogroup warns of consequences

Eurogroup chief Jeroen Dijsselbloem reiterated on Friday evening that a decision on the final tranche would be made within the next month and urged Athens to meet the terms of the agreement.

"Ignoring the compromises is not the road to follow," he told reporters.

He further rejected Athens' demand for a special debt conference to address Greece's problems, saying that the Eurogroup, which is comprised of the EU's finance ministers, already fulfilled that role.

In its latest quarterly recommendations, Greece's Parliamentary Budget Office warned that Athens could face default if it didn't reach a deal for the next installment of money.

Tsipras with Giannis Varoufakis
Tsipras (left) won elections on a wave of anti-austerity sentimentImage: picture-alliance/AP Photo/InTime News/G. Liakos

Despite warnings, Tsipras has proved steadfast in his resolve this week to make good on anti-austerity campaign promises, which won his Syriza party 36.3 percent of the vote in last Sunday's general elections.

Since taking office, Prime Minister Tsipras has insisted that Greece wants to keep the euro as its currency. However, his support for rolling back the troika's terms - including the cancellation of several privatization projects - and a partial write-off of its debts has raised concerns about the feasibility of continued partnership as a eurozone member.

Brussels and governments in other EU countries are also wary of the political turmoil spreading to other countries with high unemployment, such as Spain, Italy and France.

Spiegel: more German money?

Shortly after Greece's stubborn message on Friday evening, the online version of German magazine Der Spiegel reported on speculation in Berlin about the government injecting up to 20 billion euros into Greece to help compensate for collapsing tax revenue and stops to privatization plans.

A spokesperson from Germany's finance ministry denied the report, adding that speculation about the sum didn't make sense.

But the magazine cited its own government source contending that the rumor was true and insisting that Berlin's denial of the plan was a reaction directly linked to the episode involving Varoufakis on Friday.

Earlier in the evening, German Finance Minister Wolfgang Schäuble expressed Berlin's willingness to work with Athens, but emphasized the need for "solidarity in Europe."

"We cannot be blackmailed," he said.

kms/gsw (AP, AFP, Reuters, dpa)