Greece faces day of reckoning as debt deadlines loom, Varoufakis 'wings clipped'
Finance minister Yanis Varoufakis undermined by new negotiating team appointment
The strain between Greece and its creditors worsened, after Eurozone finance ministers said they will not release further financial aid until Athens meets the terms of its bailout.
Greek Prime Minister Alexis Tsipras has appointed deputy foreign minister Euclid Tsakalotos as co-ordinator of a re-jigged team to lead negotiations with the country's lenders, while German newspaper Bild suggested that Greece has revised its list of reforms and was ready to suspend its minimum-wage plans.
Tsipras and senior aides expressed support for Yanis Varoufakis after the finance minister received stinging criticism from fellow European finance ministers last week and agreed Varoufakis would supervise the new team.
FDR, 1936: "They are unanimous in their hate for me; and I welcome their hatred." A quotation close to my heart (& reality) these days
— Yanis Varoufakis (@yanisvaroufakis) April 26, 2015
The appointment suggested, according to Reuters, that Oxford-educated economist Tsakalatos, a soft-spoken professor well-liked by other countries' officials, would have a more active role in face-to-face talks from now on.
On Sunday, Tsipras held a phone conversation with German Chancellor Angela Merkel and Eurogroup president Jeroen Dijsselbloem to discuss the progress of debt negotiations, a government official said.
Athens owes €1.5bn (£1.1m) in state wages and pensions by the end of this week and owes €950m to the International Monetary Fund in two separate instalments both due next month.
According to a source cited by Bloomberg, households and companies withdrew almost €1.3bn from Greek banks last week, while Germany’s Bild newspaper reported on Monday that Tsipras had asked Merkel to call an emergency summit of European Union leaders.
However, the rumour has since been dismissed by a Greek government spokesman.
“The unusually candid way in which Eurozone finance ministers criticised their Greek counterpart at the Riga Eurogroup meeting on Friday shows not just the lack of real progress,” said Christian Schulz, senior economist at Berenberg.
“It makes it plain that it is Greece that has to change its stance, returning to the policies that had started to bear fruit in 2014.
"We maintain our probabilities: 30% risk of Grexit, 70% probability that, possibly after some serious political strains in Athens, Greece stays in the euro and returns more or less to the path of virtue."
Meanwhile, according to a number of polls, a large majority of Greeks want their country to remain in the Eurozone.
According to a Kappa Research survey published in Greek weekly To Vima, 71.9% of those surveyed said a deal with creditors would be best for the country, while 23.2% supported the government’s confrontational stance.