On Sunday, in his first major parliamentary speech since becoming PM, Mr Tsipras said the government's "irreversible decision is to implement in full our pre-election pledges", namely, a gradual rise in the minimum wage to €751 (£557; $850) by 2016, a bonus payment to low-income pensioners, reinstatement of public sector employees "fired illegally", and a pension fund using revenues from natural resources. Notable were the more fund raising aspects, a new tax on large properties, and special measures fighting against corruption and tax evasion.
In a clarification during a CNN television broadcast tonight Mr Varoufakis explained that the government planed to reinstate illegally dismissed public workers, only about 1% of those made redundant.
ANALSIS
He also repeated claims that Germany should pay World War II reparations and repay a loan the Nazis had forced the Bank of Greece to pay them during occupation. Greece had "a moral obligation to our people, to history, to all European peoples who fought and gave their blood against Nazism", he said. Following his diplomatic tour earlier this week aimed at reassuring Eurozone leaders of Greek plans, Mr Tsipras added in his speech that Greece wanted to service its debt. "If our peers want so, too, they are invited to come to the table of dialogue so we can discuss how to make it viable."
But the Eurogroup, made up of Eurozone finance ministers, chairman Jeroen Dijsselbloem had said on Friday that Greece needed to apply for a bailout extension should it want continued Eurozone support, "We don't do bridging loans."
The Greek Finance minister, said on Italian television on Sunday that the euro was as "fragile" as a house of cards. "If you take out the Greek card the others will collapse."
COMMENT
This is pure brinkmanship by the new Greek government, Mr Varoufakis, a Professor of Economic Theory at the University of Athens, and author of several books on 'game theory,' has laid out the tactics quite clearly.
1. annoy your opponent - remind Germany of its War liabilities
2. appear conciliatory - reassure other leaders of your good intentions
3. aggravate your opponent - indicate their previous transgressions
4. appear reasonable - declare willingness to discuss matters, but on your terms
5. use veiled threats - exaggerate the fragility of the opposing position
6. use coercion if necessary - Seeking alternative funds from China or Russia has been mentioned
Something has to be done to help the typical Greek citizen, I'm sure its not funny living off an average wage of around €650 (Note the intended rise of the minimum wage). Not many of us in Western Europe could do that, sure rents have fallen, but prices in the shops remain higher than they are here. Mr Tsipras has to implement radical reforms of the kind that previous Greek governments have been unable or reluctant to do. Revenues have to be collected from the countries large corporations which so far have been able to evade taxation. Apparently a recent meeting of Officials and corporate bosses resulted in their threatening to relocate outside of Greece should there be moves to enforce taxation, even though enevitably this would cost them more. So Mr Tsipras has some not easy choices ahead of him.
Let us assume that to maintain a clean sheet Germany complies with its war Time obligation and repays the afore mentioned loan, this will not help Greece greatly, its only about €8 billion, compared to the total debt of €320 billion.
Referring to the Euro falling apart, if Greece reverts to the Drachma, voluntarily or otherwise, Messrs Tsipras and Varoufakis should not assume that the Euro leaders are unwilling to accept these consequences. Depending on Greece's behaviour they will be calculating the comparative costs to the Eurozone of having Greece in or out. Messrs Tsipras and Varoufakis are well aware of the consequences for Greece of a Eurozone exit. Should they be referring to Italy and Spain, then certainly these countries leaders will be observing what will happen to Greece after such an exit, but no one is expecting it to be pretty sight.
Greece is a former communist country so in retrospect either China or Russia would not make such strange bedfellows, but should they really decide to go down that road then the current Greek powers would be well advised to remember that he who pays the piper calls the tune!
So much for the PR battlefield, if we want to anticipate Mr Varoufakis next move we may gain some insight by reading one of his books, but there again Mrs Merkel may just refuse to play. Never forget what your uncle told you, "don't try to teach your Grandmother to suck eggs!"
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