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| New Leader in Greece Now Faces Creditors | |
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| ATHENS — As the new Greek prime minister turns to fulfilling his campaign pledge of renegotiating his country’s bailout loans and reducing its staggering debt burden, he may find that Greece’s international creditors will be harder to persuade than the country’s voters. | ATHENS — As the new Greek prime minister turns to fulfilling his campaign pledge of renegotiating his country’s bailout loans and reducing its staggering debt burden, he may find that Greece’s international creditors will be harder to persuade than the country’s voters. |
| Riding a populist wave to victory, Alexis Tsipras, who was sworn into office on Monday, threw down the gauntlet to European officials who have pushed budget sacrifices that many believe led to a grinding recession and high unemployment. | Riding a populist wave to victory, Alexis Tsipras, who was sworn into office on Monday, threw down the gauntlet to European officials who have pushed budget sacrifices that many believe led to a grinding recession and high unemployment. |
| “We will bring an end to the vicious circle of austerity,” Mr. Tsipras promised a cheering crowd after his victory on Sunday. | “We will bring an end to the vicious circle of austerity,” Mr. Tsipras promised a cheering crowd after his victory on Sunday. |
| On Monday, eurozone finance ministers meeting in Brussels said they would begin negotiations with the Greek government on the terms of financial support, but warned that the talks would be arduous. And they made clear that — at least for now — they were unlikely to oblige Mr. Tsipras on his demands, especially his pledge to seek a write-down of Greece’s huge debt. | On Monday, eurozone finance ministers meeting in Brussels said they would begin negotiations with the Greek government on the terms of financial support, but warned that the talks would be arduous. And they made clear that — at least for now — they were unlikely to oblige Mr. Tsipras on his demands, especially his pledge to seek a write-down of Greece’s huge debt. |
| “I don’t think there’s a lot of support for that in the eurozone,” said Jeroen Dijsselbloem, president of the group of eurozone finance ministers. | “I don’t think there’s a lot of support for that in the eurozone,” said Jeroen Dijsselbloem, president of the group of eurozone finance ministers. |
| Nor were European officials inclined to accommodate Mr. Tsipras’s demands for Greece’s creditors to renegotiate the terms of a bailout program that has totaled 240 billion euros, or about $270 billion at current exchange rates. | Nor were European officials inclined to accommodate Mr. Tsipras’s demands for Greece’s creditors to renegotiate the terms of a bailout program that has totaled 240 billion euros, or about $270 billion at current exchange rates. |
| “There are rules that must be met in the eurozone,” Christine Lagarde, managing director of the International Monetary Fund, said in an interview published on Monday by Le Monde. The I.M.F. is one of Greece’s three main creditors, along with the European Central Bank and the European Commission. | “There are rules that must be met in the eurozone,” Christine Lagarde, managing director of the International Monetary Fund, said in an interview published on Monday by Le Monde. The I.M.F. is one of Greece’s three main creditors, along with the European Central Bank and the European Commission. |
| “We cannot make special exceptions for specific countries,” Ms. Lagarde said. | “We cannot make special exceptions for specific countries,” Ms. Lagarde said. |
| Still, as Mr. Tsipras moves to carry out his pledges, the standoff may ultimately find both sides reaching a middle ground — one on which Greece could move toward an eventual economic and social recovery, with European officials at least partly relaxing their insistence on strict budgetary discipline. | Still, as Mr. Tsipras moves to carry out his pledges, the standoff may ultimately find both sides reaching a middle ground — one on which Greece could move toward an eventual economic and social recovery, with European officials at least partly relaxing their insistence on strict budgetary discipline. |
| “It’s clear that the euro area is going to give Greece another extension of a few months for the new government to be formed and negotiations to begin,” said Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. | “It’s clear that the euro area is going to give Greece another extension of a few months for the new government to be formed and negotiations to begin,” said Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. |
| Mr. Tsipras “may try to deliver a centrist swing,” Mr. Kirkegaard said, but if all that fails, “then you’re going to have a period of acute instability.” | Mr. Tsipras “may try to deliver a centrist swing,” Mr. Kirkegaard said, but if all that fails, “then you’re going to have a period of acute instability.” |
| Mr. Tsipras’s new coalition government, which his leftist party Syriza formed on Monday with a rightist fringe party that has taken its own hard line against austerity measures, does not have a lot of time. Greece needs its next allocation of bailout money — a €7 billion payment — to keep the government running and pay off looming debts to avoid a potential default. | Mr. Tsipras’s new coalition government, which his leftist party Syriza formed on Monday with a rightist fringe party that has taken its own hard line against austerity measures, does not have a lot of time. Greece needs its next allocation of bailout money — a €7 billion payment — to keep the government running and pay off looming debts to avoid a potential default. |
| But Mr. Tsipras, who once likened his stance toward Europe’s leaders to “playing poker,” has begun the game aggressively against the three big creditors, known as the troika. | But Mr. Tsipras, who once likened his stance toward Europe’s leaders to “playing poker,” has begun the game aggressively against the three big creditors, known as the troika. |
| In his victory speech, he seemed to invite a showdown. “The troika has no role to play in this country,” he told supporters. But then, without explaining the distinction, he vowed to negotiate with Greece’s European partners to produce “a fair solution so that Greece can come out of debt, and Europe can return to stability and social cohesion.” | In his victory speech, he seemed to invite a showdown. “The troika has no role to play in this country,” he told supporters. But then, without explaining the distinction, he vowed to negotiate with Greece’s European partners to produce “a fair solution so that Greece can come out of debt, and Europe can return to stability and social cohesion.” |
| Mr. Tsipras has insisted that the issue of debt relief concerns not only Greece but also other eurozone countries as the currency union, with 19 members, is now halfway through what threatens to be a decade of anemic economic growth. He has called for a European conference similar to the one held after World War II that wrote off half of West Germany’s debt and extended the repayment period for the rest, to stoke a recovery. | Mr. Tsipras has insisted that the issue of debt relief concerns not only Greece but also other eurozone countries as the currency union, with 19 members, is now halfway through what threatens to be a decade of anemic economic growth. He has called for a European conference similar to the one held after World War II that wrote off half of West Germany’s debt and extended the repayment period for the rest, to stoke a recovery. |
| But some analysts say that Mr. Tsipras may not have the luxury of floating grand regional strategies. “He needs to be able to find a solution that resumes financial flows to Greece, and he doesn’t have much time,” said Mohamed A. El-Erian, chief economic adviser at Allianz. “In this game of poker, there is a question of who of the many people sitting around the table will blink first.” | But some analysts say that Mr. Tsipras may not have the luxury of floating grand regional strategies. “He needs to be able to find a solution that resumes financial flows to Greece, and he doesn’t have much time,” said Mohamed A. El-Erian, chief economic adviser at Allianz. “In this game of poker, there is a question of who of the many people sitting around the table will blink first.” |
| Those with whom Mr. Tsipras must deal, Mr. El-Erian noted, include not only the troika, but also Germany — the biggest individual country contributor to the Greek bailout — as well as private creditors. | Those with whom Mr. Tsipras must deal, Mr. El-Erian noted, include not only the troika, but also Germany — the biggest individual country contributor to the Greek bailout — as well as private creditors. |
| Mr. Tsipras has vowed not to adhere to the austerity conditions required for Greece to get the €7 billion payment, which would be the last installment of the bailout package. But Ms. Lagarde warned that Mr. Tsipras was conflating the notion of austerity with basic reforms needed to improve the Greek economy. | Mr. Tsipras has vowed not to adhere to the austerity conditions required for Greece to get the €7 billion payment, which would be the last installment of the bailout package. But Ms. Lagarde warned that Mr. Tsipras was conflating the notion of austerity with basic reforms needed to improve the Greek economy. |
| “They must reform the efficiency of the state and get their tax collection system working,” she said in the interview with Le Monde. “That’s not austerity. Those are reforms that they still need to do.” | “They must reform the efficiency of the state and get their tax collection system working,” she said in the interview with Le Monde. “That’s not austerity. Those are reforms that they still need to do.” |
| Ms. Lagarde’s view matters in Athens because Greece has a €2.5 billion I.M.F. loan it is obliged to pay off by March, and billions more in debt to the European Central Bank due in July. | Ms. Lagarde’s view matters in Athens because Greece has a €2.5 billion I.M.F. loan it is obliged to pay off by March, and billions more in debt to the European Central Bank due in July. |
| In the summer, Greece must also pay about €460 million to investors, including private equity and hedge funds that did not agree to participate three years ago in a write-down of the country’s debt. Those bonds are covered by international law and must be honored if Greece is to avoid a default. | In the summer, Greece must also pay about €460 million to investors, including private equity and hedge funds that did not agree to participate three years ago in a write-down of the country’s debt. Those bonds are covered by international law and must be honored if Greece is to avoid a default. |
| “Would a Syriza-led government honor that?” asked Jens Bastian, an economics consultant based in Athens and a former member of the European Commission’s task force on Greece. “Because for €460 million, you can feed a lot of homeless people.” | “Would a Syriza-led government honor that?” asked Jens Bastian, an economics consultant based in Athens and a former member of the European Commission’s task force on Greece. “Because for €460 million, you can feed a lot of homeless people.” |
| The elections also create a quandary for the European Central Bank, which must balance its role as guarantor of financial stability in the eurozone with the fact that it holds about €25 billion in Greek government debt. | The elections also create a quandary for the European Central Bank, which must balance its role as guarantor of financial stability in the eurozone with the fact that it holds about €25 billion in Greek government debt. |
| Mario Draghi, the president of the European Central Bank, has said that it may consider buying Greek bonds this summer under the stimulus program that he announced last week to help circulate more money through beleaguered European economies. That move could give Mr. Tsipras enough time to show that Greece can meet the conditions for its debt to be part of the program. | Mario Draghi, the president of the European Central Bank, has said that it may consider buying Greek bonds this summer under the stimulus program that he announced last week to help circulate more money through beleaguered European economies. That move could give Mr. Tsipras enough time to show that Greece can meet the conditions for its debt to be part of the program. |
| The European Central Bank on Monday declined to comment on the Greek election results, but the bank is unlikely to agree to accept any losses on the Greek bonds that it already owns. | The European Central Bank on Monday declined to comment on the Greek election results, but the bank is unlikely to agree to accept any losses on the Greek bonds that it already owns. |
| “Greece has to pay, those are the rules of the European game,” Benoît Coeuré, a member of the executive board of the European Central Bank, said in an interview with the French radio station Europe 1 on Monday. The French finance minister, Michel Sapin, spoke up for Mr. Tsipras when talking to reporters on Monday in Brussels. | “Greece has to pay, those are the rules of the European game,” Benoît Coeuré, a member of the executive board of the European Central Bank, said in an interview with the French radio station Europe 1 on Monday. The French finance minister, Michel Sapin, spoke up for Mr. Tsipras when talking to reporters on Monday in Brussels. |
| “If this new government was elected, it’s also because Greece has lost 25 percent of its national wealth in the space of five years,” Mr. Sapin said. “That’s extremely heavy, extremely hard for people to bear.” | “If this new government was elected, it’s also because Greece has lost 25 percent of its national wealth in the space of five years,” Mr. Sapin said. “That’s extremely heavy, extremely hard for people to bear.” |