Greek leftist Tsipras says ECB cannot shut Greece out of stimulus

By Reuters

Jan 04, 2015 01:31 AM EST

Greek leftwing opposition leader Alexis Tsipras said the European Central Bank (ECB) could not exclude Greece if it decides to move to a full "quantitative easing" program to stimulate the euro zone's faltering economy.

Speaking at a party congress on Saturday, three weeks before a Jan. 25 general election, Tsipras also said his Syriza party would ensure much of Greece's debt was written off as part of a renegotiation of its international bailout deal.

The election takes place three days after a Jan. 22 policy meeting at which the ECB may decide to proceed with a quantitative easing (QE) program to pump billions of euros into the euro zone economy by buying government bonds.

Tsipras said he hoped ECB President Mario Draghi would decide to go ahead with the program and said Greece could not be shut out, as some economists and politicians from countries including Germany have suggested.

"Quantitative easing by the ECB with direct purchases of government bonds must include Greece," Tsipras said.

The comments underline the pressures facing Draghi ahead of the decision, with many in Germany opposed to full-scale QE which they fear will create asset bubbles and remove incentives for reform-shy governments to act.

Syriza, which holds a slim opinion poll lead over Prime Minister Antonis Samaras' center-right New Democracy party, has moderated its tone in recent months, pledging to keep Greece in the euro and not to unilaterally repudiate the bailout deal.

But the prospect of a Syriza-led government has set financial markets on edge and caused alarm in Germany, where a succession of politicians and economists have argued the euro zone could cope with Greece's exit.

In a speech laced with barbs against German Chancellor Angela Merkel and finance minister Wolfgang Schaeuble, Tsipras said his party would roll back many of the austerity policies imposed by the bailout "troika".

"Austerity is both irrational and destructive. To pay back debt, a bold restructuring is needed," he said.

Repeating many policy pledges first laid out last year, he promised to do away with a real estate tax, freeze house foreclosures, raise the minimum wage and reinstate a 12,000 euro ($14,400) tax-free threshold to help low earners.

He said he would abandon the goal of achieving primary budget surpluses, aimed at cutting Greece's debt burden equivalent to more than 175 percent of gross domestic product.

But he pledged to protect bank deposits and ensure public finances remain on a sound footing.

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