Attempting to sound an emollient note, Mr Varoufakis told the Financial Times the government would no longer call for a headline write-off of Greece’s €315bn foreign debt. Rather it would request a “menu of debt swaps” to ease the burden, including two types of new bonds.
The first type, indexed to nominal economic growth, would replace European rescue loans, and the second, which he termed “perpetual bonds”, would replace European Central Bank-owned Greek bonds.
He said his proposal for a debt swap would be a form of “smart debt engineering” that would avoid the need to use a term such as a debt “haircut”, politically unacceptable in Germany and other creditor countries because it sounds to taxpayers like an outright loss.
This is quite interesting because the UK has already issued "perpetual bonds".
Mr Varoufakis said the government would maintain a primary budget surplus — after interest payments — of 1 to 1.5 per cent of gross domestic product, even if this meant Syriza, the leftwing party that dominates the ruling coalition, would not fulfil all the public spending promises on which it was elected.
Which is quite a climb down from the initial position.
Then the boxing clever statements...
Rather than ask for €7bn in aid that was to have been paid to Greece last year if it had met fiscal policy and structural reform conditions set by its creditors, the government would request only €1.9bn — equivalent, Mr Varoufakis said, to the profits earned by the ECB from its purchases of Greek government bonds after the 2010 rescue.
I mean, how could they say NO??? They're supposed to be helping, not making a killing on Greek Debt. This is going to put quite a lot of people in a quandary. I notice that the statement of bonds that are "indexed to nominal economic growth" was not explained in detail. But my bet is that they pay no interest unless the economy grows. Which means it is then in the best interests of the EU to make sure that Greece grows and does not suffer. Quite clever really and turns the tables on those who are making a lot of money out of Greek misery.
I expect Germany to say NO. But I also expect that they will be made to look overbearing and unreasonably grasping for profit. It's going to be an interesting year. Greece may get booted yet, but if it does, then Germany is going to have it's reputation dragged through the gutter.
Never a dull day in Euroland these days....
I think they paid back £50 million in the '60s, but that can't anywhere near have covered it