Greek PM easily wins confidence vote, EU showdown looms

Updated: 2015-02-11 12:06


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Underlining the fragile relations with some of Europe's most powerful countries, Greek Foreign Minister Nikos Kotzias took his government's claim for World War Two reparations directly to Berlin on Tuesday - and received a clear rebuke.

German Foreign Minister Frank-Walter Steinmeier said Berlin was fully aware of its political and moral responsibility for the "terrible events" in Greece during the Nazi occupation from 1941 to 1944. "Still, we are firmly convinced that all reparations issues, including forced loans, are judicially settled once-and-for-all," he added.

Another minister announced in parliament plans to halt a Canadian-run gold mine project and cancel a development scheme at Athens' former airport, part of a wider roll-back of privatisations that were agreed as a condition of the bailout.

Varoufakis has proposed a six-month transition during which Greece wants to be allowed to issue more short-term treasury bills, run a smaller budget surplus and receive European Central Bank profits on Greek bond holdings.

He said on Monday Athens wants to scrap about 30 percent of the current bailout's conditions, to be replaced by measures approved by the Organisation for Economic Cooperation and Development, and implement 70 percent of the recommendations.

Greece would use the interim period to negotiate a rescheduling of its official debt, swapping euro zone government loans for GDP-linked bonds and ECB-held debt for interest-bearing perpetual bonds, he said.

EU officials say the proposals were unlikely to be acceptable in anything like their current form, but they might contain the seeds of a compromise under which debt repayments would be extended further into the distant future, with a longer grace period before interest payments fall due.

Euro zone creditors led by Germany, the bloc's main paymaster, first want to see firm commitments to an economic reform programme under outside supervision incorporating policies agreed by the previous conservative-led government.

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