Greece rules out requesting extension to bailout

Greek prime minister Alexis Tsipras struck a defiant tone in an address to parliament in Athens, as he ruled out requesting an extension of the Greek bailout when meeting his European counterparts at a summit in Brussels this week .

Two weeks after he swept to victory in a snap election, Mr Tsipras expressed confidence that agreement could be reached between Greece and its international lenders, but he ruled out requesting a bailout extension.

“The bailout failed,” he said on Sunday evening. “The new government is not justified in asking for an extension . . . because it cannot ask for an extension of mistakes.”

His speech also set out plans for a number of domestic reforms, such as tackling tax evasion and banning ministerial cars for politicians, as well as what he called the “humanitarian crisis” caused by the bailout.

Rather than an extension of the bailout when it expires on February 28th, Mr Tsipras reiterated his demand for a bridge programme to tide the country over until June, when a more long-standing loan arrangement can be established.

His comments look set to put him on a collision course with the eurogroup, which meets on Wednesday. Eurogroup chief Jeroen Dijsellbloem explicitly ruled out the question of a bridging programme on Friday. "We don't do bridging loans," he said.

Risking the ire of his euro zone counterparts, Mr Tspiras announced a series of reversals to measures implemented as a condition of the Greek bailout, including plans to raise the minimum wage to €751 a month by 2016 and restoring the tax-free income threshold to €12,000.

This week is expected to be a crucial one in the standoff between Athens and its international creditors, as Mr Tsipras and his finance minister, Yanis Varoufakis, come face to face with their counterparts at two meetings in Brussels.

The eurogroup's finance ministers, including Ireland's Michael Noonan, gather on Wednesday for a special meeting to be attended by Mr Varoufakis. And EU leaders meet for a scheduled summit the following day, which is also expected to be dominated by Greece.

No bid backing

Around 80 per cent of Greece’s outstanding debt due to official creditors, mainly other euro zone countries. So member states, including

Ireland

, are unlikely to back any bid for a debt writedown.

A day before he is due to host Mr Tsipras at a one-day summit in Vienna, Austrian chancellor Werner Faymann became the latest leader to voice concern about a debt deal for Greece.

“I am not in favour of handing over money to the Greeks,” he said. “Who’s supposed to pay for that? I do, however, support negotiations over technical credit conditions so that the country will have more room to manoeuvre to exit the crisis.”

Meanwhile Mr Varoufakis warned in an interview with Italian television that other countries, including Italy, could leave the euro if Greece was allowed to exit the single currency.

"I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous," he said. "Who will be next after us? Portugal? What will happen when Italy discovers it is impossible to remain inside the straitjacket of austerity?"