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Syriza Leader Alexis Tsipras Sworn in as New Greek Prime Minister,

Picks Yanis Varoufakis as his Finance Minister

January 27, 2015 

 

	Economics professor Yanis Varoufakis, middle, confirmed he would become Greece's next finance minister on Tuesday, January 27, 2015

 

Greece election: Syriza leader Alexis Tsipras sworn in as prime minister, forms coalition government with Independent Greeks

abc news, January 27, 2015

Greece's new left-wing leader Alexis Tsiprahs has been sworn in as prime minister after agreeing to create a coalition with a right-wing party to form a new hardline, anti-bailout government and end nearly five years of austerity measures.

At the age of 40, he becomes the youngest Greek prime minister in 150 years.

Raw Greek emotion

Couples stood with their arms around each other. A father hugged his son to him. Young men bunched together with the red Syriza flags wrapped around their shoulders. They were all crammed in the square outside the University of Athens, listening intently to Alexis Tsipras, the man who has connected with their years of frustration, and fashioned a stunning political win for the radical left.

What was notable on this day was not just the joy felt by long-ignored left-wing advocates, dancing around strewn political leaflets in central Athens until the early morning. What struck me was how many times people who said they didn't normally vote left-wing wanted a return to "humanity".

Austerity had stripped them of this, they said. Echoing Alexis Tsipras, they say this win is giving them hope that dignity will return to Greece. Brussels will soon learn how strongly a nation that feels humiliated can kick back. By Europe Correspondent Mary Gearin

Mr Tsipras, characteristically without a tie, also broke with tradition by taking a civil instead of a religious oath, pledging to "always serve the interests of the Greek people".

The new leader started talks with his potential coalition partners the day after the election, with his Syriza party just two seats short of what was needed to be able to rule in its own right.

Independent Greeks party leader Panos Kammenos emerged from a meeting with Mr Tsipras announcing the two parties had agreed to form a coalition government.

"From this moment on there is a government, we will give a vote of confidence to the new prime minister," Mr Kammenos said.

While their positions on many social issues are at odds, both parties are vehemently opposed to the austerity program imposed on Greece by its European creditors.

After his victory, Mr Tsipras repeated his campaign pledge to renegotiate the terms of Greece's 240-billion-euro bailout with the European Union and the International Monetary Fund, which many Greeks blame for exacerbating the economic hardship the country has endured since the financial crisis.

Those creditors are watching and waiting as they consider how to negotiate with Greece's new leaders.

Euro-zone leaders urge Greece to uphold prior agreements

Closely watching the election, Europe's bureaucrats have been adamant that Greece needs to keep to its bailout deal.

Eurogroup chief Jeroen Dijsselbloem warned Greece that its euro membership depended on Athens sticking to prior agreements, after the radical left Syriza party won elections with a vow to renegotiate its debts.

"Membership of the eurozone means that you comply with everything you have agreed with," Mr Dijsselbloem said as he arrived for talks of eurozone finance ministers in Brussels.

"On that basis, we're ready to work with them."

The Greek election win for anti-austerity party Syriza could help Italy's push for greater flexibility in the European Union's approach to budget and broader economic issues according to Italy's foreign minister Paolo Gentiloni.

"There has been a tug of war for months between austerity and flexibility," he said.

"There is no doubt the Greek result, if politically managed by Greece and the European Union with realistic and flexible negotiations, favours the call for an end to the inflexibility we Italians have been making."

Meanwhile, German chancellor Angela Merkel said she expects the new Greek government to uphold its commitments to international creditors, her spokesman said.

"In our view it is important for the new government to take action to foster Greece's continued economic recovery," the spokesman, Steffen Seibert, told reporters.

"That also means Greece sticking to its previous commitments."

British prime minister David Cameron wants Greece's new government to keep tackling the country's budget deficit and to meet its international commitments, his spokeswoman said.

"The prime minister respects the decision of the Greek people but obviously there are questions for the eurozone and for Greece about how they deliver on their commitments," his spokeswoman said.

"Spending more on public finances is not proven to be driving growth in Greece or indeed in other European countries so it needs to continue to deal with its deficit and it needs to meet its international commitments."

Spain's conservative prime minister Mariano Rajoy also weighed in, congratulating Mr Tsipras and hoping for a "stable" government.

"I hope the election result leads to the forming of a stable government committed to the program of European integration that Greece and Spain share," Mr Rajoy wrote.

Reuters/AFP

Anti-austerity economist says to become Greek finance minister

By Lefteris Papadimas

ATHENS Tue Jan 27, 2015 6:43am EST

(Reuters) -

Economics professor Yanis Varoufakis confirmed he would become Greece's next finance minister on Tuesday, promising to defy advice to "put up or shut up" and find solutions that favour all Europeans rather than just Greeks.

After two years of waiting in the wings, Prime Minister Alexis Tsipras and his Syriza party stormed to power in Sunday's snap election on a wave of anger against German-backed austerity that has driven up poverty and pushed unemployment over 25 percent.

Appointing Varoufakis to the key finance portfolio signals Tsipras's intent to adopt a hardline against EU/IMF negotiators financing the country and roll back four years of tough economic policies.

Varoufakis is expected to be formally appointed when Tsipras unveils his cabinet later on Tuesday. His administration is expected to be smaller and more centralized than in the past, with several ministries merged.

"The time to put up or shut up has, I have been told, arrived. My plan is to defy such advice," Varoufakis wrote on his blog. "To continue blogging here even though it is normally considered irresponsible for a Finance Minister to indulge in such crass forms of communication."

A longtime critic of Europe's handling of the euro zone crisis, Varoufakis has railed against the bailouts of struggling euro zone states as "fiscal waterboarding" that risked converting Europe into a "Victorian workhouse". [ID:nL6N0V53P1]

In interviews last week, Varoufakis said the new cabinet would quickly get to work implementing campaign pledges to end what Syriza calls a "humanitarian crisis" unfolding in Greece, fight corruption and bureaucracy.

A Syriza-led government would immediately submit a series of bills to fight a "triangle of corruption" between media, banks, builders, state suppliers, he told the Ta Nea newspaper.

But speaking to Irish radio on Tuesday, Varoufakis also said he planned to negotiate a solution with lenders, saying he had already had an "encouraging and inspiring" chat with the head of the euro zone finance ministers, Jeroen Dijsselbloem.

"Make no mistake: what is beginning today is a process of deliberation with our European partners," he said.

"As the next finance minister, I can assure you that I shall not go into the Eurogroup seeking a solution that is good for the Greek taxpayer and bad for the Irish, Slovak, German, French and Italian taxpayer."

In a sign of the challenges ahead for Tsipras's fledgling government, Moody's ratings agency warned that the uncertainty created by Syriza's victory was negative for the country's credit rating. [ID:nL9N0NY01Y]

Critics say it will be difficult for Tsipras to satisfy campaign pledges without depleting the state's cash coffers. Greece is due to receive over 7 billion euros in aid but that looks uncertain after Tsipras's victory.

The new prime minister is also under pressure to quickly raise the minimum wage back to 751 euros as promised during the campaign, as well as give free electricity and food stamps to the poor and restore a Christmas bonus for poor pensioners.

Tsipras, a former student Communist, has also pledged to freeze public sector layoffs as demanded under the country's 240-billion-euro bailout, and stop an unpopular evaluation process for civil servants.

The cabinet is also expected to include the leader of his junior coalition partner, the right-wing Independent Greeks party. Panos Kammenos is expected to take the defence portfolio.

Longtime Syriza veteran and economist Yannis Dragasakis - who in the run-up to the vote demanded an investigation into how the country was forced into a bailout - is expected to become deputy prime minister overseeing ministries related to the economy.

(Additional reporting by Padraic Halpin in Dublin and Renee Maltezou in Athens, writing by Deepa Babington; editing by Anna Willard)

 

Mixed earnings, Greek jitters fuel market caution

By Lionel Laurent

LONDON, Tuesday, Jan 27, 2015 7:52am EST

(Reuters) -

The euro rose and shares slipped in Europe on Tuesday as mixed corporate earnings and concerns over Greece kept investors cautious ahead of a busy week which will include the first policy meeting of the U.S. Federal Reserve this year.

Russia was also in the spotlight after a cut to its credit rating dealt a further blow to the rouble, though by Tuesday the currency had regained some ground against the dollar.

Investors will be keen to hear the Fed's response to policy easing by global central banks such as the European Central Bank, whose long-awaited plan to buy bonds to revive the flagging euro zone economy has propelled bond yields and the euro to multi-year lows and stocks to multi-year highs.

Although core bond yields held near those lows, lower-rated bond yields rose after Europe signalled it would not yield to a new Greek government's demands for debt forgiveness, though it showed a willingness to give Athens more time to pay its debts. Top Greek shares .ATG were down 2.7 percent.

Credit markets were also jittery beyond the euro zone, with the cost of insuring exposure to Russia's debt up after Standard & Poor's cut Russia's sovereign credit rating to "junk" late on Monday, citing weakened economic growth prospects and Western sanctions over Ukraine.

"A lot of investors have been taken aback by the speed of macroeconomic adjustments," said Sean Darby, global equity strategist at Jefferies. "This is not the type of environment they like to invest in."

The pan-European FTSEurofirst 300 equity index .FTEU3 was down 0.7 percent. European heavyweights Philips (PHG.AS) and Siemens (SIEGn.DE) were among those reporting disappointing earnings or outlook statements, while in the U.S. Microsoft Corp (MSFT.O) reported a fall in quarterly profit.

Top UK shares also fell after data showed Britain's economic growth slowed more than expected in the final three months of last year, though annual growth was still at its fastest since 2007.

"Today's earnings show that global demand remains the big issue. Companies can take advantage of low rates, they can buy back stock but they cannot create demand and they will get hurt by global currency wars," said Lex Van Dam, hedge-fund manager at Hampstead Capital.

On Wall Street, U.S. equity futures SPc1 were down around 0.5 percent. A snow storm engulfing New York is expected to keep many investment banks and fund managers on skeleton staff, though the main exchanges all plan to open as usual on Tuesday.

The euro clung to rare gains, up 0.4 percent to trade at $1.11281 EUR=, taking it further from an 11-year trough of $1.1098 hit on Monday.

Investors widely expect the Fed to acknowledge the uncertain global outlook and stick to its promise to be patient on tightening. Yet its timetable remains for lift-off on rates by mid-year, a trajectory that presages further broad-based gains for the dollar.

Most Asian share markets firmed. Japan's Nikkei .N225 gained 1.7 percent, while Australia's main index .AXJO added 0.8 percent. Other moves were mostly modest and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.4 percent.

Chinese markets continued their recent erratic path and the Shanghai index .SSEC slipped 0.8 percent.

In commodity markets, U.S. crude CLc1 was quoted 11 cents lower at $45.04. Brent LCOc1 was slightly firmer at $48.21.

(Additional reporting by John Geddie, Francesco Canepa, Jemima Kelly, Karin Strohecker; Editing by Janet Lawrence)

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