Greece PM Tsipras wants 'viable' debt deal after EU talks

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Media captionGreek PM Alexis Tsipras says he is "optimistic" that an agreement will be reached

Greece's new Prime Minister, Alexis Tsipras, says he wants a "viable" deal on repaying the country's debt, after meetings with creditors in the EU.

Mr Tsipras and his finance minister are on a diplomatic offensive to reassure eurozone leaders about their plans.

Mr Tsipras wants to renegotiate the €240bn (£182bn) bailout. EU officials say Greece must honour bailout terms.

Amid uncertainty over the talks, the European Central Bank says it will restrict Greek banks' access to credit.

Greek Finance Minister Yanis Varoufakis met ECB chief Mario Draghi in Frankfurt to convince him that Greece's debt payments could be linked to the performance of the economy - the more it grows, the more interest Greece would pay - through the use of debt swaps.

But hours after their talks - which Mr Varoufakis described as "positive" - the ECB issued a statement saying Greek banks could no longer access ECB credit by using Greek government bonds or bonds guaranteed by the government.

The mechanism had been in place as part of the bailout deal.

Greece's far-left party Syriza was elected last month on a promise to end austerity measures.

"The debt must become viable, this is what we must discuss," Mr Tsipras said in Paris on Wednesday, alongside French President Francois Hollande.

"I am convinced we can work together to get out of the crisis in Greece and to help Europe overcome the crisis."

Mr Tsipras described France, which has also called for austerity measures to be eased, as "a force for stability in Europe".

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Image caption Yanis Varoufakis (right), met European Central Bank President Mario Draghi in Frankfurt

The French president said Europe should show "solidarity" with Greece and seek alternatives to austerity. However, he warned that Greece would have to respect "commitments that have been made in connection to debts related to states".

'Elections change nothing'

Earlier on Wednesday, Mr Tsipras met the leaders of the three top EU institutions in Brussels - European Commission President Jean-Claude Juncker, European Council President Donald Tusk and European Parliament President Martin Schulz.

At a joint news conference, Mr Schulz described their talks as "fruitful" but said there were difficult times ahead.

Image caption Unrelated to Mr Tsipras's visit, a blow-up Trojan horse appeared at the European Commission as part of protests against a major free trade deal being discussed by the EU and US

In a newspaper interview with German daily Handelsblatt, Mr Schulz has warned that Greece risks bankruptcy if it does not honour its commitments.

"If Greece unilaterally changes the agreements, the other side is no longer obliged to stick to them," he is quoted as saying.

Mr Tsipras's Syriza party had sparked alarm on the markets and among eurozone officials when it said it would refuse a new tranche of bailout funding, prompting questions about how it would finance itself.

Greece's current programme of loans ends on 28 February. A final €7.2bn is still to be negotiated, but the new government has already begun to roll back austerity measures.

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Media captionMark Lowen reports from Athens on a busy first week in office for Greece's new leader.

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Greek economy in numbers

  • Unemployment is at 25%, with youth unemployment almost 50%
  • Economy has shrunk by 25% since the start of the eurozone crisis
  • Country's debt is 175% of GDP
  • Borrowed €240bn (£188bn) from the EU, the ECB and the IMF

Wednesday's talks were the latest in a series of European trips to reassure leaders about the plans of a government elected on 25 January on a promise of writing off most of Greece's spiralling debt.

Mr Varoufakis is hoping to obtain quick cash for Greece while a new plan is agreed amongst the various eurozone members. Eurozone finance ministers are due to meet on 11 February to discuss Greece's debt proposals.

On Thursday, Mr Varoufakis is expected to meet German Finance Minister Wolfgang Schaeuble. Mr Schaeuble has emerged as the one of the toughest critics of the new Greek government, previously saying: "Elections change nothing. There are rules."

German Chancellor Angela Merkel has ruled out debt cancellation, saying creditors have already made concessions.