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Tsipras Vows to Cancel Bailout as Make-or-Break Greek Vote Looms

June 01, 2012

Tsipras Vows to Cancel Bailout as Make-or-Break Greek Vote Looms

Alexis Tsipras, leader of the Syriza Party, said he sought the vote of the Greek people in elections on June 17 to cancel the terms of an international rescue. Photographer: Kostas Tsironis/Bloomberg

Alexis Tsipras, head of Greece’s biggest anti-bailout party Syriza, appealed to Greeks to give him the power in elections on June 17 to cancel the terms of an international bailout and restore pensions and wages.

“The choice for Greeks on June 17 is one: bailout or Syriza’s government program,” Tsipras said, presenting his campaign platform in Athens today. “You either implement the bailout or you cancel it. There is no such thing as a more or less evil bailout, a more or less inappropriate medicine.”

Tsipras’s promise to abrogate the terms of the rescue loans amounts to a bet the European Union and International Monetary Fund will stop short of kicking Greece out of the 17-nation euro. The cuts required for 240 billion euros ($306 billion) of aid over the past two years have driven the country into the worst recession since World War II.

He said Syriza would replace the bailout with a plan for economic and social development and “fair fiscal reform,” while canceling “onerous” terms and seeking a renegotiation of the loan agreement.

Syriza was propelled to second place in inconclusive May 6 elections. Failed coalition talks prompted the need for a revote. Most opinion polls show Syriza and New Democracy, which voted for the bailout, vying for first place. Neither has enough support at this point to rule alone, the surveys show.

Tsipras has said he’ll try to keep Greece in the euro while pledging to cancel austerity measures. He said today the bailout terms were designed to drive Greece out of the euro area.

‘False Dilemma’

“It is a mechanism of definitive bankruptcy and propelling the country into a voluntary departure from the euro area, the only exit that is institutionally viable,” he said. “This false dilemma of ‘bailout or drachma’ hides the real equation that the bailout leads to the return of the drachma.”

Syriza’s plan is to revoke all austerity measures that have deepened the recession. He said pursuing tax evasion and taxing high-income earners, including abolishing tax breaks for shipowners, would boost revenue to the EU average. Syriza will cancel laws tied to the bailout such as cuts to the minimum wage and reduce sales taxes on some basic goods, such as bread and milk, as well as sales taxes for key sectors such as tourism, he said.

He said banks being recapitalized under a 50 billion-euro fund granted by international creditors would be “nationalized and socialized” and said the party would keep public companies of strategic importance, freezing commitments to sell assets. Companies already sold, such as Hellenic Telecommunications Organization SA (HTO) will “gradually and in line with the abilities of the economy” be brought back under state control.

First Vote

Syriza’s unexpected gains in the May 6 election left New Democracy and Pasok, which supported the second international rescue in an interim government this year, two deputies short of the 151 seats needed for a majority in Parliament.

Syriza won 16.8 percent of the vote compared with New Democracy’s 18.9 percent. Under Greek election rules, the winning party gets an extra 50 seats in Parliament. Four opinion polls today showed both parties vying for first place.

To contact the reporters on this story: Maria Petrakis in Athens at Maria Petrakis at mpetrakis@bloomberg.net Natalie Weeks at nweeks2@bloomberg.net

To contact the editors responsible for this story: Tim Quinson at tquinson@bloomberg.net


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