Berlin---Greece's new finance minister will meet his German counterpart Thursday, a day after the European Central Bank piled fresh pressure on Athens by cutting off Greek banks' access to a key source of much-needed cash.
Yanis Varoufakis will hold his first talks with German Finance Minister Wolfgang Schaeuble, whose country is seen as the strongest opponent of any easing in the terms of the massive debts Greece has built up, in Berlin.
The ECB's decision to no longer allow Greek banks to use government debt, which has a junk rating, as collateral for loans will likely feature heavily in their talks.
The announcement rattled financial markets, sending the euro tumbling by more than one percent against the dollar, and prompting the Greek finance ministry to insist that the country's banking system "remains adequately capitalised and fully protected".
The ECB statement came just hours after Varoufakis held his first talks with ECB chief Mario Draghi as part of his push to renegotiate his country's 240-billion-euro ($270 billion) EU-IMF bailout.
Both Prime Minister Alexis Tsipras and Varoufakis -- whose left-wing Syriza party stormed to victory in elections on January 25 -- have been touring Europe in recent days to build support for a new debt agreement with creditors.
Elected on a pledge to end austerity policies imposed on Greece as part of its bailout, Tsipras faces the delicate task of persuading his European partners to reverse course while ensuring Athens still gets the aid required to avoid a default.
In Brussels, Tsipras struck an upbeat note after talks with European Commission chief Jean-Claude Juncker and EU president Donald Tusk, saying he was optimistic of a "viable and mutually acceptable solution".
A Greek government source said Tsipras and Juncker discussed plans to jointly create a four-year reform plan for Greece, as well as a bridging deal to give Athens time to draw up plans for reforms including on corruption and tax evasion.
But Tusk acknowledged that resolving the showdown over Greece's debt was likely to be "difficult" and needed "cooperation and dialogue as well as determined efforts by Greece".
- 'Fruitful' ECB talks -
Ahead of the ECB talks in Frankfurt, Varoufakis told the German weekly Die Zeit that the ECB "should support our banks so that we can stay afloat", acknowledging that Greece was "a bankrupt country".
The former economics professor later described his talks with Draghi as "very fruitful".
But after a meeting of its policy-setting governing council late Wednesday, the ECB said it was ending a special lending waiver for Greece because "it is currently not possible to assume a successful conclusion of the programme review".
The ECB waiver, which will end on February 11, had allowed banks to pledge their Greek bonds as collateral, even though the securities did not meet standards for a minimum credit rating.
Separately, a Financial Times report suggested that Draghi might block a key element of Athens' plan.
According to the FT, which cited officials involved in the deliberations, the ECB is refusing to raise an agreed cap on the amount of short-term treasury bills that Athens can issue from 15 billion to 25 billion euros.
Greece faces key payments on its debt at the end of February and again at the end of May.
AFP
