Berlin, Varoufakis express bailout doubts

Greek Prime Minister Alexis Tsipras said on Wednesday that he is confident that international creditors would back a bailout deal now being examined by EU states and set for a parliamentary vote in Athens.

Top officials in Berlin, however, expressed caution on Wednesday over the proposal. "We have formulated questions," read a statement from Wolfgang Schaeuble's Finance Ministry. "These are part of the review process which is not yet completed."

In an apparent reference to Germany, Tsipras said certain EU states had a "hidden plan to reshape the eurozone, using Greece as the excuse. Greece will not give them the excuse."

German media have cited a two-page Finance Ministry document that raised questions about Greece's debt sustainability, the role of the International Monetary Fund and on privatizations. The "Bild" newspaper reports that Schäuble's ministry is concerned about Greece's annual budget targets being scaled back - and about the implementation of important measures being pushed to the fall of this year.

Chancellor Angela Merkel's office issued a more positive assessment, however, with government spokesman Steffen Seibert saying Wednesday that the agreement moves in the right direction.

Greece and its creditors are under pressure to wrap up the 85-billion-euro deal by August 20 when Athens must repay some 3.4 billion euros ($3.8 billion) to the European Central Bank.

Former finance minister sceptical

Meanwhile, Greece's former finance minister Yanis Varoufakis in an interview with BBC Radio on Wednesday warned that the latest bailout deal was doomed to fail despite Prime Minister Alexis Tsipras saying he was "confident" of ending economic uncertainty.

Varoufakis added, "Ask anyone who knows anything about Greece's finances and they will tell you this deal is not going to work. The Greek finance minister... says more or less the same thing," he said.

Tsipras is also still under pressure from hardliners in his radical left Syriza party who say the new accord will pile further austerity on a weakened economy and goes against the party's campaign pledges.

The Greek prime minister suffered a major mutiny by Syriza members in two previous votes on the bailout. Tsipras has warned that he may be forced to call early elections if the dissent continues.

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av/gsw (AFP, Reuters, AP)