





Greece will not call for a debt write-off but request a “menu of debt swaps,” including two types of new bonds, Greek Finance Minister Yanis Varoufakis told the Financial Times on Monday.

According to the newspaper, Greece “unveiled proposals on Monday for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders.”

Varoufakis told the Financial Times that the two types of bonds would include bonds indexed to nominal economic growth and replacing European rescue loans on one hand, and “perpetual bonds,” replacing Greek bonds owed by the European Central Bank (ECB) on the other. The proposal would be more acceptable to other countries who objected to any plans for a “haircut.”

“What I will say to our partners is that we are putting together a combination of a primary budget surplus and a reform agenda,” he was quoted as saying, adding that “I will say, ‘Help us reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and become a deformed rather than a reformed Greece.'”

Varoufakis said the government would maintain a primary budget surplus – after interest payments – of 1% to 1.5% of GDP, even if this meant SYRIZA would not fulfil all the public spending promises on which it was elected.

In terms of tax collection, the Finance Minister said the government would target wealthy Greeks who had not paid their fair share of taxes during the nation’s six-year economic slump, which he described as “going for the head of the fish, then [going] down to the tail.”

According to official sources, Prime Minister Alexis Tsipras is expected to announce the government’s policy program during the weekend and the details of the economic plan to EU partners before the end of February.

“Whatever our partners think about us being from the radical left, we are serious about reforms, serious about being good Europeans and serious about listening. The only thing we shall not retreat from is our view that the current unenforceable program [agreed with our creditors] needs to be rethought from scratch,” Varoufakis was quoted as saying.

According to the Financial Times, Varoufakis is on a European tour that is aimed at winning support for a renegotiation of the 245-billion-euro bailout program that began in 2010 with emergency help from the EU and International Monetary Fund.

The Minister said Greece hopes to secure a four-month “bridging program” that stretches from now until June 1, under which ECB would promise to keep Greece’s financial system afloat by continuing to supply liquidity on favorable terms.

Rather than ask for 7 billion euros in aid that was supposed to have been paid to Greece last year if it had met fiscal policy and structural reform conditions set by its creditors, the government would request only 1.9 billion euros, the Financial Times said, equivalent to the profits earned by ECB from its purchases of Greek government bonds after the 2010 rescue, according to Varoufakis.

“Our mandate gives us a right to do one little thing – to have a few short weeks to propose our own ideas to ECB, the Eurozone partners and the IMF,” he was quoted as saying. “The notion that previous Greek governments signed on the dotted line on programs that have not worked, and that we should be obliged to just follow that line unswervingly, is a challenge to democracy.”

(source: ana-mpa)



