New Greek PM promises no surprises as crucial talks begin with country's creditors

ATHENS (Bloomberg) - Prime Minister Alexis Tsipras promised not to spring any surprises on Greece's troika of official creditors in the first face-to-face meeting with European officials since his Jan. 25 election victory.

Tsipras gave assurances that Greece won't make any unexpected moves regarding its finances in about two hours of talks with European Parliament President Martin Schulz in Athens on Thursday.

"It's important that he wants to find common ground with his peers," Schulz said at a joint press conference with the Greek leader. "There are issues related to the financing of Greece, which shouldn't be tackled with unilateral actions. I realized today that Tsipras is not going to do anything like that."

Stocks in Athens rebounded on Thursday, after plunging to lows not seen since the peak of the debt crisis on Wednesday when ministers pledged to increase the minimum wage and halt privatizations. Banks, in which Greek taxpayers are the biggest shareholders, bounced after losing about US$11 billion of their value in the previous session.

"We will not continue with the failed recipe of austerity," Tsipras said, standing next to Shulz. He said that he plans to negotiate "with safety" and secure "stability" as he implements his agenda.

Tsipras said he wants to replace Greece's bailout program with a "reform programme" that would include measures to crack down on tax evasion and corruption. That conversation will continue on Friday when Jeroen Dijsselbloem, chair of the euro region's group of finance ministers, is due to arrive in the Greek capital.

"In all honesty if you sum up all their promises then the Greek budget will very quickly be out of balance and then further debt relief won't help anyway," Dijsselbloem said in Amsterdam, Thursday. "We want to keep Greece in the euro zone, in the European Union, but that also requires the Greeks to meet their commitments."

Uncertainty over the country's financing prospects under a Syriza-led government was already rattling depositors in the run-up to Sunday's election. Deposit outflows accelerated to a euro-era record last week with 11 billion euros, about 7 per cent of total deposits, leaving the system in January, according to a person familiar with the matter.

In December, deposits by businesses and households fell to 160.3 billion euros from 164.3 billion euros the previous month, according to data released by the Bank of Greece.

Standard & Poor's said it may cut Greece's credit rating, already five levels below investment grade, should the new government fail to agree more financial support for the country.

While Tsipras came to power on a platform of writing down Greek public debt, raising wages and halting spending cuts all while remaining in the euro, European policy makers have told him he'll have to choose which of those goals to aim for.

French Economy Minister Emmanuel Macron suggested little leeway for negotiation, saying that there's no "waiver" for Greece's public debt. While it's normal to have talks on Greece's debt burden, the country also has "commitments" to the euro zone that need to be respected, Macron told reporters.

Greece has to refinance 1 billion euros of Treasury bills on Feb. 6 and another 1.4 billion euros on Feb. 13, according to data compiled by Bloomberg. The government would typically do that mostly through local banks. Such a move though would add extra stress to the system as it tries to staunch the outflow of deposits.

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