Podemos leader says EU risking right-wing backlash with Greek pressure

By Esteban Duarte & Ben Sills

The euro area risks fueling extremist nationalist groups with its hard-line approach to negotiations with Prime Minister Alexis Tsipras, according to the Greek premier?s Spanish ally, Pablo Iglesias.

If Greeks don?t win relief from the euro area?s austerity program through Tsipras?s plan to write down the country?s debts and boost government spending, they may embrace the Golden Dawn party instead, according to Iglesias, who leads the Spanish anti-austerity group Podemos and is a lawmaker in the European Parliament.

?If this dynamic continues, by next year the Eurogroup will probably be negotiating with a Marine Le Pen,? Iglesias, 36, said, referring to the leader of France?s National Front, in an interview at his office at the Parliament in Strasbourg. ?I don?t think anyone wants that.?

The euro area is turning the screws on Tsipras in an attempt to force him to deliver the budget cuts and economic reforms that prior Greek governments signed up to in return for a 240 billion-euro ($269 billion) rescue program. With the country?s creditors withholding aid and rationing bank funding, Tsipras had to raid local government coffers to pay pensions this month and faces payments of almost 1 billion euros to the International Monetary Fund in the first half of May.

Tsipras swept into power three months ago promising Greeks he?d win a write down on their debt, raise the minimum wage and start hiring public workers to reboot the economy. Now he?s trying to avoid cutting pensions again and fending off further reductions in job protection for workers.

?An orderly restructuring of the debt could always be a reasonable option,? Iglesias said. ?It?s in Europe?s interests for Greece to come good and for...