BERLIN / ATHENS / BANGKOK – As another day passed with Greece no closer to a working government, European officials suggested Wednesday they had a new tool in their mission to keep the euro currency shared with all its partners: time.
Alexis Tsipras, head of the runnerup Radical Left Coalition, or Syriza, met with heads of parties across the political spectrum as he tried and failed to win support for Greece’s first leftwing government in four decades of democratic rule.
The impasse continued to hurt stocks in Asia on Thursday. The Nikkei 225 ended down 1.5 percent at 9,045.06, its lowest finish in nearly three months as traders pulled away from big exporters whose fortunes are partly linked to demand from Europe. Hong Kong’s Hang Seng fell 0.8 percent to 20,330.64.
A ticking watch may be the most powerful bargaining chip that Europe has against the possibility that Greeks opposed to the nation’s bailout will push it off the euro. Every day that ends without new European bailout money for Greece to pay its bills heightens the pressure on its leaders to comply with the tough austerity measures that are a condition of the $171 billion rescue package.
But German officials signaled Wednesday that they may be willing to relax some of the payment deadlines if a government accepting the bailout comes to power, still an uncertain prospect. They may even be willing to consider reducing the interest payments on Greece’s emergency loans, sweetening the deal without abandoning any of the fundamental overhauls that they say are necessary for Greece to get its economy back on track.
After Sunday’s elections, in which almost 2 in 3 Greek voters picked parties that oppose the bailout deal, even Greece’s probailout leaders said they wanted to renegotiate some of the terms of the rescue package. Germany’s openness for small compromises could be enough to give those Greek politicians a scrap of political cover.
But in Berlin, which because it is the main funder of Europe’s rescues is by far the most powerful voice, officials also said they would hold a hard line against changes to the core of the bailout and that it was Greece’s choice whether it kept using the euro.
“It’s very important that Greece fulfills all the rules and agreements they have made in the last months. It’s very important for the stability of the euro,” said Norbert Barthle, an ally of German Chancellor Angela Merkel who is the parliamentary budget spokesman for her party, the Christian Democratic Union. “We decided on a second aid program for Greece just a few months ago. We are not so fixed on all the times in this program and all the conditions in this program, but we have to believe in the fundamental aims, and we have to believe that Greece itself will do its part.”
Barthle said he was referring to the interest rates Greece is paying on the long-term emergency loans it receives from the European Union and the International Monetary Fund. Those rates were already reduced once in March when the bailout agreement, Greece’s second, was concluded.
“It is up to Greece to decide” whether it stays on the euro, said German Finance Minister Wolfgang Schaeuble at a conference in Brussels. “We don’t need to discuss a plan B.”
Europe has found itself approaching Greece with new leisure after agreeing in March to write off most of the country’s privately held debt as part of the second bailout and requiring the country to take tough measures to open its labor markets and push down salaries to make its economy more competitive. Until the debt writeoff, a Greece default would have spelled immediate financial panic as European banks took sudden losses on their loans to the troubled Mediterranean country. Now officials say they can afford to wait for payments, noting that the brunt of the pain of bankruptcy would fall on the shoulders of Greece’s own citizens.
Fredrik Erixon, an economist and director of the Brussels-based European Center for International Political Economy, said that some of the discussion about holding Greece’s feet to the fire may simply be posturing.