Kenny offers tacit support for renegotiation of Greek bailout

The Taoiseach has indicated tacit support for a further renegotiation of Greece’s bailout, but warned that the country must respect it obligations as a member of the euro zone.

Speaking in Davos, Mr Kenny said he could not disagree with comments made by the Finnish prime minister Alexander Stubb which indicated a softening of the Finnish position.

"We will deal with any democratic government but it will be very difficult for us to forgive any debt," said Mr Stubb before adding that he would look at extending the payment terms of Greek debt provided the country stayed within an agreed economic programme. There were three options for Greece, he said, "continuing as they are; instability and renegotiation or a dirty exit".

The Taoiseach said he "could not disagree" with his Finnish counterpart's assessment. Germany's economic's minister Sigmar Gabriel, who was taking part in a panel discussion with Mr Kenny and Mr Stubb said his advice to Greece was "to go further along the track we have agreed".

Growth and security

The panel discussion was on growth and security. The prime ministers of the Netherlands, Mark Rutte and his Latvian counterpart Laimdota Straujuma also took part.

Speaking afterwards, Mr Kenny said : “I would hope that Greece and the citizens of Greece will continue within the euro zone. I think its important to note that when a country enters a bailout there are conditions and objectives that have to be achieved.”

A renegotiation or cancelling of Greece’s debts is central plank of the left wing Syriza party which is expected to win this weekend’s election in Greece. During the discussion, Mr Kenny said it was failure of Europe’s politicians to deliver on their promises that had contributed to the rise of populist parties on both the left and right of the political spectrum.

“If you don’t deliver, you make it easy for the opposition,” he said. Mr Kenny was taking part in If Government’s don’t deliver then frustration builds amongst voters.

“The key is discipline, clarity and stability of agenda,” said Mr Kenny.

The Taoiseach also attributed the rise of populist movements in Europe to a "chasm of disconnection" between the member states and the European institutions. European countries have to work more closely with the institutions to correct this he said, referencing Ireland's approach to its bailout from the EU and the IMF.

“Instead of choosing a path of confrontation we chose constructive engagement with the troika,” he said in an oblique reference to the Greek situation.

Mr Stubb said populists parties, such as the right wing True Finn party, should not be isolated. “I think we should embrace populism with dialogue, but there has to be some limits,” he said.

Mr Rutte, the Dutch prime minister, said mainstream politicians has created the populist parties because “we have not given answers to issues”. Centrist governments tented to avoid issues such as immigration, he said.

“We need to provide the answers. We don’t have to discuss it with the populist parties. We can talk directly to the people”.

Rise of extremism

Sigmar Gabriel, the German economics minister also advocated the need for dialogue with the electorate as the way to combat the rise of extremism. “The answer is to have a fair and open discussion,” he said but he cautioned against confining the debate to the business and economic elites. “They are not the conversations that they [voters] have on the streets about issues.

Mr Gabriel referenced the proposed US EU trade deal, known as TTIP, as an example of this. The proposed pact is deeply unpopular in Germany and many other countries. "We need to bring the debate to a higher level," he said.

It was important to convince voters that it represented a last chance for Europe to set the standards for world trade. "The next agreement will be between the US and Asia, " he said.

Disquiet over TTIP was contributing to political instability in Europe, according to Mr Rutte.

“That is were politicians come in..we have to be transparent,” he said.

The panel was in agreement that there could be no end to sanctions against Russia unless it adhered to the Minsk agreement. "Russia has to implement what we have all agreed in Minsk," said Mr Rutte.

However, there is need to think about what happened next, said Mr Gabriel. He said Russia needed to be offered some sort of partnership that would allow it restructure its economy, he said. “We need to offer him [Putin] a way out.”