‘Europe has to change course’: Greece and Portugal unite to lambast EU – Telegraph.co.uk

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“We, as prime ministers of two countries with a similar policy experience in the context of their respective adjustment programmes, share the conviction that austerity-only policies are wrong and insufficient to overcome the existing challenges,” said Mr Tsipras and Mr Costa.

They added: “Europe has to change course. Instead of merely adjusting to self-defeating competitiveness and austerity measures, our two countries take the decision to closely co-operate at all levels, bilateral and European, to put forward a progressive programme of democratic Eurozone Governance, economic revival, employment creation, centered on quality jobs, and socially just and environmentally responsible growth in Europe and in our countries.”

The prime ministers also criticised the response of some EU member states to the migrant crisis, with Mr Tsipras saying that the use of teargas and plastic bullets by Macedonian police during clashes with refugees at the Idomeni makeshift camp was a disgrace to European civilisation.

The Portuguese prime minister is in Athens on an official visit.

Speaking after his meeting with Mr Costa, the Greek prime minister slammed the role of the International Monetary Fund in Greece’s bail-out talks.

“In Greece wrong policies were applied and it is a paradox that those who recognized that there were wrong policies, admitting their mistake, insist on applying the mistake,” said Mr Tsipras.

Greece is aiming for an agreement with its creditors on the next tranche of emergency loans by the beginning of May. The European Union, the European Central Bank and the IMF have been holding talks with government officials in Athens for the past week to discuss policy measures attached to the country’s bailout.

Debt talks

The biggest area of contention is the management of bad loans burdening bank balance sheets, Greece’s minister of state Nikos Pappas said, with their positions closer on a pension system overhaul and income tax reform.

“We’ll find a solution in the coming weeks,” Germany’s finance minister Wolfgang Schaeuble said in an interview with German public television channel ARD. This solution “has nothing to do with debt forgiveness, but with the fact that Greece needs to do more” to return to a competitive economy, he said.

Greek bonds have gained on expectations of an agreement, delivering the best returns of all European sovereign securities tracked by Bloomberg’s World Bond Indexes in the past month. Greek stocks rose 1.3pc on Friday.

The first review of the country’s latest bailout was originally scheduled to conclude at the end of last year. Mr Pappas attributed the delay to the IMF disputing the effectiveness of Prime Minister Alexis Tsipras’proposals for additional budget savings and its more pessimistic view of the Greek economy. The IMF also doesn’t offer any additional leverage on Greece’s calls for debt relief even though this is a commitment included in the country’s agreement with the euro area, Mr Pappas said.

“The IMF asks for salary cuts in the public sector, lifting restrictions on layoffs, cuts to main pensions, measures that will kill the economy and kill the very usefulness of a debt cut, which by the way, they can’t even guarantee,” he said. “It’s like they’re asking us to jump from the fifth floor and they promise that someone will buy us ice cream.”

Relations between the two sides turned sour this month after the government accused the Washington-based fund of banking on a credit event to force Greece to accept its positions. Greece cited the transcript of a conference call between IMF officials published by WikiLeaks.

The Fund’s managing director Christine Lagarde called the accusations “nonsense” and hinted Greek authorities were responsible for the leak in a strongly worded letter to Prime Minister Alexis Tsipras.

‘Europe has to change course’: Greece and Portugal unite to lambast EU – Telegraph.co.uk