The new Greek government said it will have new proposals on handling its debt within a month and would like to go "cold turkey" on further loans as France indicated it would consider lightening Athens' burden but not canceling it, an action opposed by German Chancellor Angela Merkel. The comments followed a meeting in Paris between French Finance Minister Michel Sapin and Greece's Yanis Varoufakis, Reuters reported, and a day after the Greek government hired U.S. investment bank Lazard Ltd. to advise it.
Varoukis said Greece will not take any more money from its international partners, saying the country had become addicted to debt, which now amounts to 175 percent of output, and it is time to go "cold turkey. … It isn't that we don't need the money, we are desperate," Varoufakis told reporters, with Sapin at his side.
"For the last five years, Greece has been living for the next loan tranche," he added. "We have resembled drug addicts craving the next dose. What this government is all about is ending the addiction."
Eurozone officials fear Greece does not recognize just how perilous its situation is. The Financial Times reported creditor countries are running out of patience. Martin Schulz, president of the European parliament and a German Social Democrat, urged Athens to ease up on the anti-German rhetoric.
“Bashing the Germans might go down well in some quarters. But it is also short-sighted and gets us nowhere,” he told Welt am Sonntag newspaper. Merkel has warned Greece not to expect a further "haircut."
The bailout is set to expire Feb. 28 if it is not renewed and would be the first time in five years Greece did not have a backstop. The Greek banking system has been relying for day-to-day funding on European Central Bank loans, but those will become unavailable if the overall program expires.
Greece's ruling Syriza party, which swept into office last week on an anti-austerity platform, said it has enough money on hand to meet its February and March obligations of 3.5 billion euros ($3.95 billion) but not the next commitment of 1.5 billion euros ($1.69 billion) due in June. Payments of 4.7 billion euros ($5.3 billion) and 3.6 billion euros ($4.06 billion) are due in July and August, respectively.
Varoufakis has been making the rounds to try to quell fears of a Greek default. He met with U.S. Treasury Secretary Jack Lew Friday and is due to meet Monday with British Finance Minister George Osborne before heading for Rome Tuesday. A meeting with German Finance Minister Wolfgang Schaeuble also is on the horizon but no date for the confab has been set.