Greece's new prime minister, Alexis Tsipras, said on Sunday he would not accept an extension to Greece's current bailout, setting up a clash with European leaders at a summit on Thursday.
Tsipras also pledged his government would heal the 'wounds' of austerity, sticking to campaign pledges of giving free food and electricity to those who had suffered, and reinstating civil servants who had been fired as part of bailout austerity conditions.
In his first major speech to parliament as premier, the Tsipras said he was still optimistic he could reach agreement with Greece's European Union partners on a new debt pact and transitional agreement.
“The bailout failed,” he said. “The new government is not justified in asking for an extension ... because it cannot ask for an extension of mistakes.”
Tsipras's speech was closely watched by EU leaders who have shown little willingness to meet Tsipras's demands, fearing a wholesale backtracking on the fiscal and economic reforms international lenders have demanded in exchange for some $270 billion worth of assistance.
Greeks have been severely hit by the austerity imposed on them by the 'troika' of European Central Bank, International Monetary Fund and European Commission lenders. The country is only just coming out of years of economic depression, but roughly one in four Greeks are unemployed.
“The first priority of this government ... is tackling the big wounds of the bailout, tackling the humanitarian crisis just as we promised to do before the elections,” Tsipras said.
He said the main battle would be against corruption and vowed to tackle Greece's long-time struggle with tax evasion.
He also announced a series of cuts to politicians' benefits such as banning ministerial cars and selling one of the prime minister's aircraft.
Tsipras said he would also end a property tax and replace it with a tax on high-value property.
Over the past week, Greek officials have laid out what they see as a transitional plan to keep finances flowing over the next few months while they renegotiate their debt agreement.
Instead of the next tranche of bailout funds — roughly $8 billion, due pending a suspended review — Greece's new government wants the right to issue more short-term debt beyond a current $17 billion threshold. It also wants $2.3 billion in profits from Greek bonds held by the European Central Bank and other euro zone authorities, something that was agreed previously.
With that as a bridge, Greek officials would then try to renegotiate payment of Greek sovereign bond debt, perhaps by extending payments, only paying interest and getting some respite on the budget surplus it is expected to run.
One government official suggested that not everything had to happen at once.
“The pace of the implementation of our promises is 'within four years',” the official said.