EUROPE

Prime Minister of Greece Will Not Prolong Bailout

By NIKI KITSANTONIS
ATHENS — As pressure grows on Greece to reach a deal with its international creditors and avert fears that it will default on its huge debt, Prime Minister Alexis Tsipras said Sunday that his government would not seek an extension of a stringent bailout program and would carry out its campaign pledges to roll back austerity, but gradually.
In laying out his program in a speech to Parliament, Mr. Tsipras sought to satisfy coalition lawmakers and supporters that his government would honor the anti-austerity pledges that brought it to power last month while reassuring creditors that it is prepared to move toward a compromise that keeps the economy afloat without further burdening European taxpayers.
Greece’s creditors — the European Commission, the European Central Bankand the International Monetary Fund — want the new government to seek an extension beyond Feb. 28 of the European portion of the country’s bailout of 240 billion euros, or $270 billion. The government, however, has said that despite dwindling cash reserves, it is not interested in the latest portion of the bailout, a loan of €7 billion, because of what it sees as onerous conditions. Instead, it has said it wants a program between now and the end of May to bridge the gap and permission to raise short-term funding by issuing treasury bills.
In his first major Parliament speech, Prime Minister Alexis Tsipras of Greece vowed Sunday to honor anti-austerity pledges. Alkis Konstantinidis/Reuters
Mr. Tsipras said extending the bailout would be tantamount to continuing the “mistakes and disaster” of the past, and he said his government needed “fiscal space” for discussion on restructuring of debt.
“We only have one commitment: to serve the interests of our people, the good of society,” he said, noting that it was an “irreversible decision” of his government to fulfill its promises “in their entirety.”
Mr. Tsipras also pledged to replace a hated unified property tax, which combines several levies, with a new tax on large property and to increase the tax-free threshold on annual income to €12,000 from the current €5,000. Cracking down on tax evasion and corruption were also underlined as priorities.
Immediate action will be taken, he said, to restore collective wage bargaining, bringing unions back into negotiations on workers’ salaries and working conditions. He also pledged to gradually restore the minimum wage to €751 a month from €586.
As a jab at Germany, which has been leading the austerity drive in Europe, Mr. Tsipras said it was Greece’s historical duty to seek war reparations and the repayment of a loan it was forced to make to Germany in World War II.
The Greek authorities have already met with resistance, even in France and Italy, whose governments have pushed back against austerity measures. A tour of European capitals last week by Mr. Tsipras and Finance Minister Yanis Varoufakis failed to win firm support for Greek ambitions to write down a €320 billion debt burden and to revoke some of the most severe cutbacks. And approval for issuing treasury bills must come from theEuropean Central Bank, which has said it will no longer accept Greek bonds as collateral for liquidity, increasing the pressure on the country’s banks.
This week promises to be even tougher for Mr. Tsipras. His radical leftist coalition, with 162 lawmakers in the 300-seat Parliament, is expected to secure a confidence vote on Tuesday. But his foreign audience will be harder to win over. A day before Mr. Tsipras faces his European Union peers at a summit meeting on Thursday, Mr. Varoufakis will meet eurozone counterparts in Brussels and is certain to be pressed to seek an extension to Greece’s bailout. The International Monetary Fund’s managing director, Christine Lagarde, and the European Central Bank’s president, Mario Draghi, will also attend, increasing the pressure.
The Greek debt issue is also expected to figure on the Group of 20 finance ministers agenda on Monday and Tuesday amid growing concern about the implications for the global economy.
“We don’t intend to threaten stability in Europe,” Mr. Tsipras told Parliament. “Greece remains a focus of international interest,” he said, but this time “as a protagonist, not as second fiddle.”
“The problem is not just Greek. It never was,” he said. “The crisis is not just Greek; it is European.”
After the speech, the opposition party New Democracy expressed concern about whether the negotiations would be successful “after all that was heard today,” an apparent reference to the government’s insistence on revoking some austerity measures and not seeking a bailout extension.
Already Athens is being squeezed. After last week’s decision by the European Central Bank on Greek bonds, Standard & Poor’s cut its credit rating on Greece further into junk status, to B-, and warned of a possible default or an exit from the eurozone in “the worst case scenario.” Moody’s followed suit, saying it was placing Greece “on review” for a downgrade.
Greece is expected to return to growth this year after a six-year recession that has pushed unemployment above 25 percent and slashed household incomes by a third. Last week, however, the European Commission lowered its growth forecast for Greece to 2.5 percent, from an estimate of 2.9 percent in November.
Correction: February 8, 2015 
An earlier version of this article misstated the body that lowered its growth forecast for Greece. It was the European Commission, not the European Union.