Euro has been traded at almost flat in the last few days after US economic data disappoints and new insights into Greek debt resulutions surfaced. The new Greek Finance Minister Yanis Varoufakis is in official trip to Europe which aimed at renegotiating the terms of Greek debt payments and garner supports from leading creditors.

Euro has been traded at almost flat in the last few days after US economic data disappoints and new insights into Greek debt resulutions surfaced. The new Greek Finance Minister Yanis Varoufakis is in official trip to Europe which aimed at renegotiating the terms of Greek debt payments and garner supports from leading creditors.

Menteri

Anti-Austerity Minister

Yanis Varoufakis is known as a radical economist that called Austerity as fiscal waterboarding and publicly oppose to the plan that has been promoted by German Chancellor Angela Merkel. Because of that, market at first worried when PM Alexis Tsipras appointed him as Finance Minister. But apparently doubts are lifted a bit somehow after Varoufakis slowly revealed his plans. Below are several of his cause:

1. Swap Outstanding Debts With Growth-linked Bonds
In a report by Financial Times (3/2), Varoufakis mentioned that his country will no longer demands for cuts on its international debts. They pledged to pay back their debts to IMF and ECB, while asking to swap their European debts into a type of new bonds, indexed to nominal economic growth. The proposal, he said, may prevent the possibility of hair-cut that has been the bane of German and other Greek creditors.


KomposisiGreek Debt Breakdown. Source: money.cnn.com.

With the proposal, Varoufakis apparently wanted to underline Greece's new government in resolving its debts, as well as asking its creditors for some space. He said, What I'll say to our partners is that we are putting together a combination of a primary budget surplus and a reform agenda. I'll say, 'Help us to reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and become a deformed rather than a reformed Greece'.

2. Pursue Wealthy Tax Evader
In the same reports, Varoufakis also said that Greek government is going to pursue tax avoiders among wealthy Greeks. He compared it to going for the head of the fish, then go down to the tail.

Wealthy Greeks are known for their diligence in evading taxes. There are even rumours that head of tax offices were pushed out of their seats when they touch the country's elites. On the other hand, Greek workers in the last six years has been suffering under austerity regime that implement wage cuts. These unfair projections are among the reasons behind Syriza victory in the latest Greece election, and it looks like they are going to fulfill their voters' aspiration.

3. Defend Primary Budget Surplus
Varoufakis also indicated that they are going to avoid new debts. Greek government, he said, will maintain primary budget surplus around 1-1.5% of Gross Domestic Product, although it may  prevent Syriza from fulfilling all of its campaigned promises.

In the past years, Greek were as if they are addicted to debts; continue making new debt in fulfilling its payments on due dates as well as in running the country. But the era might have come to an end if Varoufakis managed to gain trust from European leaders. Resolving old debts and avoid new debts look like going to be the Greek's new government main target.

Euro Stay Wait And See

Talks between Yanis Varoufakis and UK Chancellor of the Exchequer, George Osborne, yesterday apparently ended in a positive note, After meeting Varoufakis, Osborne tweeted, Constructive meeting with Greek finance min @yanisvaroufakis. Standoff between Greece & Eurozone fast becoming biggest risk to global economy. The tweet may have indicated support for a resolution between Eurozone and Greece which he consider as particularly important. Before, Greece also received verbal supports from US President Barack Obama and France Finance Minister Michel Sapin.

But Europe stay cold. While Greek PM Alexis Tsipras wants Troika to be abolished, spokeperson of German Chancellor Angela Merkel said that their government do not see a reason for that. In a meeting on January 30th with Head of Eurogroup Finance Ministers, Jeroen Dijsselbloem, Varoufakis
also said that they do not want to work with Troika again as a single entity, and wanted to deal separately with ECB, IMF, and European Commission. In response, Dijsselbloem only reiterated his previous advice for the Greek new government to abide by the last debt agreement.

In short, the Greek drama is still ongoing and it could surprise anytime as Greece default risk stays. Investors tend to 'wait and see' while negotiations underway. Now that Greece has stated its intentions, the market will likely wait for responses toward Greece proposal. Yanis Varoufakis has a long way forward, and so does pressures on the Euro which stemmed from uncertainty surrounding Greece debt.