Tsipras vows to defy EU on Greek debt

Europe would be foolish to cut off funding to Greece, the head of Greece's radical left group says, but if it does, Greece will repudiate its debts, he said. "Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Alexis Tsipras told The Wall Street Journal. "If we can't convince them -- because we don't have the intention to take unilateral action -- but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors," he said. Tsipras, 37, is president of the Synaspismos political party and head of the Coalition of the Radical Left parliamentary group, known as SYRIZA. SYRIZA is leading in opinion polls ahead of the follow-up vote next month after becoming Greece's second-biggest party in an inconclusive May 6 general election that left no party or coalition with enough seats in Parliament to form a government. Tsipras accused pro-euro politicians Tuesday of trying to blackmail Greek voters into supporting further austerity measures. He said his party would "not betray the hopes and expectations of voters who rejected the bailout." About 70 percent of votes cast May 6 went to anti-austerity parties. Almost 54 percent of adults surveyed after the election said Greece should continue to carry out reforms mandated by the International Monetary Fund, European Union and European Central Bank to stay in the euro. Thirty-eight percent said they would reject the program even if it meant immediate bankruptcy, said the poll of 1,002 people, conducted May 10-11 by Rass SA and published Monday in Greece's Eleftheros Typos newspaper. No margin of error was given. Fitch Ratings Thursday downgraded its credit ratings on Greece two notches further into junk territory, pointing to the increased risk Greece would exit the eurozone. "Whatever we do, things will be difficult," Tsipras told the Journal. "But it will also be difficult at the same time for all of Europe because the euro will collapse" if Greece's funding is cut off, he said. All sides should come together "before we reach that point" and find a "European solution," he said. The IMF, EU, ECB and other eurozone leaders had no immediate comment on Tsipras' remarks. Greece's economy, in its fifth year of recession, is forecast to shrink a further 4.7 percent this year. Some private economists say the contraction could be more than 7 percent, the Journal said. Spain's economic flames leaped higher Thursday evening, as the country's borrowing costs rocketed to unsustainable levels and the country's banking sector was hit by mass downgrades. Moody's Investors Service slashed the ratings of 16 Spanish banks, citing the reduced ability of Madrid to provide support to the sector, as well as the "adverse operating conditions" characterized by a renewed recession. Shares in the Spanish lender Bankia SA plummeted 30 percent at one point Thursday after the Spanish newspaper El Mundo reported customers had withdrawn more than $1.3 billion in deposits since Spain was forced to partly nationalize the bank last week. Bankia declined to comment on the report, but told Spain's National Securities Commission withdrawals of the past two weeks were of a "substantially seasonal nature." It said it was confident the balance of its deposits would not undergo "substantial changes" over the next few days. Bankia has total deposits of about $142 billion. Bankia stock prices fell more than 14 percent Thursday, to about $1.77 a share, after falling more than 11 percent Wednesday. At one point Bankia was down 29 percent Thursday. Its shares are down more than 60 percent from their $4.75 listing price last July.