Brussels-Athens Don't Bite the Feeding Hand

European Parliament President Martin Schulz explains why the new Greek government would be ill-advised to make good on its threats to withdraw from its agreements with the E.U.
The imposed austerity measures haven't exactly won the E.U. many friends in Greece.

Martin Schulz has met twice with newly elected Greek Minister Alexis Tsipras, who is trying to ease the demands of European creditors - once in Athens and once during the newly elected prime minister's visit to Brussels on Wednesday. Each time, Mr. Schulz has emphasized the need for compromise and cooperation.


Handelsblatt: Mr. Schulz, you wanted to have straight talks with Mr. Tsipras. Did it work?

Martin Schulz: We were and remain open and honest with each other in our conversations. That also includes hard truths. Alexis Tsipras and I agreed from the very beginning that only compromise and cooperation are productive, not provocation and finger-pointing. But that was precisely what a few ministers then proceeded to do, even if they are now backpedaling. In the last few days in Athens, there has been a constant back and forth between attacks and attempts to calm the situation. That leads me to conclude the government isn't on track yet.

Is there a system behind this deliberate confusion?

I don’t think so. But it does seem to me that Mr. Tsipras is acting moderately in this government. He may be a radical leftist, but that's his right. He makes a reasonable impression on me, which isn’t necessarily true of others in the administration. There are many inexperienced people now in office who still have to learn how to speak with their European partners.

But there's no time to learn, given that the aid program for Greece expires at the end of February. Could the country face bankruptcy after that?

Put simply, if Greece unilaterally terminates the agreements, the other side is no longer obligated to abide by them. Then no more money goes to Athens, and the government can no longer fund itself. Greece should avoid this situation.

Greek debt GDP growth Aid programs

So Mr. Tsipras needs to commit to the reform program and ask for an extension?

The Greek government has no choice. It has to fulfill the obligations it made to its European partners. Only under that condition can we talk about whether we are willing to make concessions to Athens.

What should they be?

There are alternatives to the current policy. Neither European Commission President Jean-Claude Juncker nor I are big fans of the very harsh austerity measures pursued to date. They have affected ordinary people more than they should. Everyone in the European Union is willing to help the Greeks provide social relief. But that can only be done on the basis of the existing agreements.

Social welfare costs money. Where is it supposed to come from?

We could suspend national co-financing for money from the E.U. structural funds. This would enable Greece to quickly obtain additional liquidity from the E.U. budget. But the commission is only willing to consider this if Mr. Tsipras complies with the agreements.

Does Mr. Tsipras now have to forget all his campaign promises?

He doesn't have to do that. The Greeks also elected Syriza because they are tired of corruption and patronage. During the crisis, large fortunes were moved abroad, escaping taxation. If Mr. Tsipras wants to bring this money back and asks for help, he'll find open doors in Brussels.

Will the European Union freeze Greek accounts abroad?

If Mr. Tsipras asks for it, ways will be found to provide the Greek tax authorities with access to assets in other E.U. countries. This also applies to accounts in countries with which the European Union has signed tax treaties.

Seeing eye to eye? Greek Prime Minister Alexis Tsipras and European Parliament President Martin Schulz.


Mr. Tsipras is giving Berlin a wide berth, and his cabinet ministers are attacking the German government. How long can the German-Greek relationship endure this sort of thing?

I made it clear to Mr. Tsipras that his government isn't doing itself any favors by insulting Germany. Syriza's obsession with German Chancellor Angela Merkel is cheap campaign rhetoric and inappropriate.

The Greeks' anger is also directed against the troika, which is now supposed to disappear.

The current construct of the troika has enabled the Greek government to avoid taking political responsibility for necessary reforms, so that it could blame the troika instead. This can’t continue. The new government has to take responsibility for the reform process. If it does that, we won't need a troika.

So no more supervision?

It no longer makes sense to send officials to Athens, where they are perceived as proconsuls. The Greek finance minister can discuss the reform measures directly with the commission and the euro group [meeting of the E.U. finance ministers, eds.]. But we still have to determine how the IMF will then be involved.

Video: European Parliament President Martin Schulz on the results of the Greek election.

Ruth Berschens is Handelsblatt's bureau chief in Brussels and covers European policy. Thomas Ludwig reports on politics and companies from the Brussels office. To contact the authors: [email protected], [email protected]