The finance minister of Greece argued with his counterpart in the Federal Republic of Germany as borrowing costs climbed and bank shares in the country dropped after the European Central Bank opted to discontinue funding from lenders.
German Finance Minister Wolfgang Schaeuble told Minister Yanis Varoufakis it was impractical to turn out electoral vows that caused trouble to other nations.
On the other hand, Varoufakis disagreed with him during a joint press conference. Both ministers were not able to patch up their differences. Schaeuble maintained that the new government should conform to agreements made with the Union and cooperate with the IMF, ECB and European Commission.
Prime Minister Alexis Tsipras is not inclined to extend the bailout program which will conclude by the end of February. It rejected any pitch made by the trio of international lending institutions. It also promised to repeal certain disliked measures imposed by foreign creditors. Aside from this, the Greek premier said it will cut short some privatizations, increase minimum wages, rehire terminated public sector workers, and give bonuses to poor pensioners.
The stock exchange in Athens (FTSE Banks Index – FTATBNK) declined 22.6 percent at first and closed 10 percent behind. Government borrowing costs increased to almost 20 percent which left the country shut out from capital markets.
Central bank governor Yannis Stournaras insisted Greek banks remained stable and are still in control.
Athens offered a bridging system till the end of May to facilitate debt discussions and promised that Greece will do everything to keep away from default.
French President Francois Hollande as well as Prime Minister Matteo Renzi of Italy supported the decision made by the ECB and urged both sides to arrive at a quick conformity.
