Commission spokesman MargaritisSchinassaid today in Brussels that the Troika could give way to "a more democratically legitimate and more accountable structure, based around European institutions with enhanced parliamentary control both at European and at national level.”
The "troika" is a group of unelected specialists from the Commission, the ECB and International Monetary Fund that supervises Greece's finances. Greek Finance minister Yanis Varoufakis has called the Troika "a committee built on rotten foundations".The new Greek government has refused to negotiate with it, and it is thefirst time that the EU Commission hints that itcould be replaced.
The change in tone happens asGreek prime minister Alexis Tsipras andFinance minister Yannis Varoufakisare travelling to Italy for talks with government officials. On Wednesday, Tsipras will meet Juncker in Brussels and then travel to Paris, while Varoufakis is expected to meet ECB President Mario Draghi in Frankfurt, and then German Finance Minister Wolfgang Schaeuble in Berlin on Thursday.
Hopes for a deal between Greece and its European lenders got a boost after the country's new government backed away from demands to write off a chunk of its bailout loans, a prospect that had horrified creditors and investors.
Greek stocks led a European market rally Tuesday after the finance minister Varoufakis said the new radical left government was willing to accept alternative strategies to making his country's debt load more bearable.
Signs of relief also came from the European Union, where the president of the executive Commission, Jean-Claude Juncker, said the bloc will "have to adapt a certain number of our policies" to accommodate Greece.
The Financial Times reported that during a visit to London on Monday, Finance Minister Yanis Varoufakis had backed off the idea of a flat debt write-off. Instead, he suggested exchanging Greece's debt to its bailout creditors with bonds that would be repaid only if Greece's economy grows. He also offered using so-called "perpetual" bonds — which allow issuers to pay interest forever while foregoing the principal.
That would be a less confrontational approach than the government's previous insistence on a write-off, which would have implied a cut in the face value of Greek bonds held by Eurozone countries and the European Central Bank.
Historically, creditor countries have often written off debt owed by poorer nations. Greece's case is complicated, however, by the fact that it is part of a currency union — richer countries like Germany do not want to set a precedent for other states that might get into financial trouble.
German Chancellor Angela Merkel refused to comment specifically on the bond proposal Tuesday, but did not reject it outright. She said the Greek government had only been in office for a few days and that she was sure there "will be sufficient opportunities" to discuss various proposals with them.
Greece has to strike a comprehensive deal with its creditors by the end of June, as otherwise it would be unable to repay some 7 billion euros worth of bonds maturing in July and August.
Elected Jan. 25, Prime Minister Alexis Tsipras' government quickly riled creditors and investors with its insistence on a root-and-branch overhaul of its bailout, including the austerity budget measures that creditors had required. The government quickly froze privatization plans and reversed previous reforms.
"After a very rocky start last week, the new Greek government is faring better this week," Berenberg Bank analyst Holger Schmieding wrote in an email. "The charm offensive of the new finance minister Varoufakis seems to be paying off in financial markets."
The suggested bond swap would considerably ease Greece's debt burden. It would also prove a softer sell to taxpayers in Germany, the Netherlands and other European creditors.
http://www.neurope.eu/article/not-so-legitimate-troika-commission-softens-its-tone-towards-greece