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Greece's newly appointed Finance Minister Yanis Varoufakis addresses journalists following a swearing in ceremony at the presidential palace in Athens, January 27, 2015. Greek Prime Minister Alexis Tsipras unveiled a cabinet of anti-austerity veterans on Tuesday, signalling he has no intention of backing away from election pledges despite warning shots from the euro zone and financial markets. REUTERS/Alkis Konstantinidis Reuters/Alkis Konstantinidis

The Greek government is reportedly talking with other European countries in order to find a solution to the debt problem the country is facing. The government is said to be facing difficulties in its attempts to convince some of the countries, especially Germany.

According to a report by Bloomberg, the Prime Minister of Greece has changed his mind on demands for a write-down of the country’s debt. He may have taken the decision after members of the European Union (EU) opposed the idea.

The new government’s commitment to increase spending will be against the conditions for getting aid from other countries. The Prime Minister of Greece, Alexis Tsipras, ran an election campaign that focused on anti-austerity and making changes to the current bailout package the country is receiving. The Prime Minister reportedly said at a recent press conference that he is looking for “mutually acceptable, viable solutions on the dreaded question.”

The Prime Minister has reportedly met with officials in Nicosia, Cyprus, Paris, Rome and Brussels. He will be meeting Angela Merkel at the European Union’s meeting next week. One option for his government to solve the debt problem in the short term is to issue Treasury bills.

But there may be difficulties for the government to issue Treasury bills due to a reported fall in demand for them. According to a report by the WallStreetJournal an official at the EU has confirmed that the member countries and the European Central Bank are reluctant to allow Greece to sell Treasury bills.

The current limit on issuing Treasury bills by Greece is € 15 billion. An informal request by the Finance Minister of Greece, Yanis Varoufakis, to increase the limit to € 25 billion has reportedly been rejected. This may cause some difficulties for the government to make debt repayments that are due in the next few months.

Greece reportedly has a debt of about € 4 billion to be repaid to the International Monetary Fund and other smaller creditors in the months of March and June. ECB bonds of about € 7 billion are set to mature in July and August. The country is said to have just two weeks to come to an agreement with other EU members, before the current bailout package expires.

For questions/comments regarding the article, you may email the writer at s.trivedi@ibtimes.com.au

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