London campaigners take to the streets as Syriza gives up on debt relief

Debt-relief campaigners projected a mock-up photo of Angela Merkel onto the German embassy in London last night, as news emerged that Syriza had effectively U-turned on its opposition to austerity.

Despite an overwhelming vote of support in last week's referendum, Greek prime minister Alexis Tsipras appeared to have substantially backed down in his confrontation with the Eurozone.

A new plan published last night involved most of the austerity measures rejected by the public last Sunday and made no mention at all of debt relief.

Even as details of the plan began to emerge, activists from Global Justice Now and Jubilee Debt Campaign were at the German embassy in west London calling for debt cancellation, the pursuit of pro-growth policies and regulation of the banking sector.

"We are saying to Angela Merkel what David Cameron and George Osborne won't: Greece needs debt cancellation," Jonathan Stevenson from Jubilee Debt Campaign said.

"Just as for Germany in 1953 and various countries in Africa in the 2000s, it is the only way for Greece to have a chance of escaping the economic straightjacket it is in. But without an end to German and wider eurozone denial of the severity of Greece's debt crisis, and the extent to which their own banks have benefited from the bailouts, debt relief cannot happen.

"Even a deal this weekend to save the euro will simply postpone the day of reckoning, unless it includes clear commitments to wipe the slate clean and drop the debt."

Merkel has said that a "classic haircut" is out the question, in a comment which tacitly suggested some other form of relief was possible. That is considered inevitable in the medium-term by most economists, but there is no mention of it at all in the agreement Tsipras is putting to the Greek parliament this morning ahead of European negotiations.

Yesterday, the European Council called on both sides to make major concessions and singled out creditor countries to do their part. It was the first time a European institution acknowledged what is widely understood: that Greek debt, which stands at 180% of GDP, will never be repaid.

The Greek plan appears to constitute a complete U-turn from the Greek prime minister, with the exemption that it secures financing for years rather than months. Nevertheless, it remains unclear how he will be able to sell the deal to the Greek people given the overwhelming referendum result he secured just a few days ago.

George Osborne repeatedly failed to say he supported debt relief for Greece despite fierce questioning from MPs across the Commons on Monday, but an early day motion has been signed by 49 Labour, SNP, Plaid and Green MPs calling for the restructuring of Greek debt, including debt cancellation and a grace period without payments.