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Greece wants more time

May 14, 2015

Greece's outspoken finance minister has said Athens should delay repayment of billions of euros it owes the European Central Bank, but that the prospect of pushing back the due date fills Mario Draghi's "soul with fear."

https://p.dw.com/p/1FPjc
Yanis Varoufakis
Image: Getty Images/AFP/E. Dunand

The bonds in question - worth some 27 billion euros ($30 billion) - were purchased by the ECB in 2010 and 2011. Come July and August this year, Athens will have to repay 6.7 billion euros to the central bank from those bonds.

"What must be done [is that] these 27 billion of bonds that are still held by the ECB should be taken from there and sent overnight to the distant future," Finance Minister Yanis Varoufakis told the Greek parliament on Thursday. "How could this be done? Through a swap. The idea of a swap between the Greek government and the ECB fills Mr. Draghi's soul with fear."

Varoufakis went on to say that Draghi was intimidated by pressure from Germany's central bank, the Bundesbank, and its president, Jens Weidmann, who also has a seat on the ECB's governing council.

Germany opposes the ECB's stimulus program, a bond-buying scheme known as quantitative easing (QE) that Weidmann and others say gives indebted countries incentive not to push through unpopular reforms.

'Strictness trap'

At an economic conference in Athens, he also said Greece must escape the "strictness trap" and that he would not sign any deal wih international creditors that does not help Greece get out of the crisis.

"Because if I do sign, I'll be yet another finance minister who signs a midterm fiscal adjustment program

Greece is already at risk of defaulting on its bailout loans and has been embroiled in marathon talks with its international lenders since the leftist government of Prime Minister Alexis Tsipras came to power earlier this year.

Those talks concern the release of a final 7.2 billion euros in bailout funds that Greece's paymasters - the ECB, the European Union and the International Monetary Fund - say they will only provide if Athens pushes through the necessary reforms.

Varoufakis told lawmakers that Greece's public coffers were already overstretched and this his government would be unable to repay what it owed the ECB for the bonds on time.

"It's quite simple, these bonds must be pushed into the future," he said.

cjc/ng (Reuters, AFP)