(MENAFN- The Peninsula) Greece's new leftist government appealed to the European Central Bank yesterday to keep its banks afloat as it seeks to negotiate debt relief with its eurozone partners, but Germany rejected any roll-back of agreed austerity policies.
Finance Minister Yanis Varoufakis said after meeting ECB President Mario Draghi in Frankfurt he believed Athens could count on central bank support during the short period it would take to conclude talks with international lenders.
Banking sources said that two Greek banks have begun to tap emergency liquidity assistance from the Bank of Greece after an outflow of deposits. The Greek government wants that funding to continue because if the ECB were to halt it, Greek banks could collapse, forcing the country out of the eurozone. Promising to end five years of austerity, Prime Minister Alexis Tsipras and Varoufakis are meeting senior officials across Europe to seek support for a new debt agreement.
However a document prepared by Germany for a meeting of EU finance officials tomorrow made clear Berlin wants Athens to go back on promises to raise the minimum wage, halt unpopular sales of national assets, rehire fired public sector workers and reinstate a Christmas bonus for poor pensioners. "The Eurogroup needs a clear and front-loaded commitment by Greece to ensure full implementation of key reform measures necessary to keep the programme on track," the document said in reference to eurozone finance ministers.
"The aim is the perpetuation of the agreed reform agenda (no roll back of measures), covering major areas as the revenue administration, taxation, public financial management, privatisation, public administration, health care, pensions, social welfare, education and the fight against corruption."
A Greek official said the document showed Germany was entering into negotiations, but he added: "It is obvious that these suggestions will not be accepted by the Greek government. They are clashing with the recent mandate given by the Greek people and this not help with the growth perspective of Europe."
The new Greek leaders have had a cautious reception so far, even in left-leaning countries such as France and Italy which Athens had hoped would support its case for debt relief.
French President Francois Hollande said the eurozone's rules applied to everyone.
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