Sides scramble for compromise on Greek debt
Nation will make loan payment due this week, prime minister says
BRUSSElS — Greek Prime Minister Alexis Tsipras emerged from late-night talks with EU officials in Brussels saying that a deal with creditors was “within sight” and that Athens would make a payment due to the IMF on Friday.
But while the European Commission said “progress was made in understanding each other’s positions,” the leftist-led Greek government still rejects benefit cuts and tax rises its EU and IMF creditors want before they release fresh loans to avert a bankruptcy that could disrupt the eurozone and world markets.
Commission President Jean-Claude Juncker, who hosted Tsipras for a late dinner at the EU executive’s headquarters with the chair of eurozone finance ministers, Jeroen Dijsselbloem, would reconvene their meeting in the coming days, officials said after the talks broke up in the early hours of today.
With Europe’s big powers and the United States- concerned about the unpredictable effects of talks dragging on while Greek reserves shrink toward zero, creditors signaled a will to compromise, nota- bly by lowering how much surplus they want a new budget to generate to service Athens debts.
But as Tsipras’s party battles to retain support from voters who elected in January to end years of austerity, its spokesman in parliament renewed tough rhetoric at home.
Nikos Filis told a Greek broadcaster the government would not sign any “ultimatum” and would rather hold a new election if forced into a corner.
Tsipras is balancing a hard-line faction in his party that is keen to spend Greece back toward economic growth with impatient lenders in the rest of the eurozone and the wish of a large majority of Greeks not to be forced to give up the EU currency.
Hours after Syriza party spokesman Filis warned that Greece might not repay the $335 million in International Monetary Fund loans that fall due on Friday if a deal was not at hand, a smiling Tsipras gave assurances in Brussels that Athens would continue to honor its commitments.
“Don’t worry about it,” he told reporters. “We have already paid 7.5 billion (euros), so we will continue.”
Of the talks, he reprised the positive tone he has taken since he secured a fourmonth extension of a bailout package in February: “I believe an agreement is in sight,” he said. “But we need to conclude the discussions with a realistic point of view,” he added, making clear his reservations.
Referring to what negotiators say have been reductions in the targets creditors are setting for Greece’s primary budget surplus — what it has left from other expenses to fund its debts — Tsipras said: “We are very close to an agreement on the primary surplus. That means all sides agree to go further without tough austerity measures of the past.”
But he also again ruled out scrapping a particular benefit for low-income pensioners or a value-added tax change that he said would raise the tax on electricity by 10 percentage points.
This week has seen the creditors sketch out a possible compromise and the government draft its own proposals. “At the end of the day,” Tsipras said, “I think the proposals on the table will be the proposals of the Greek government.”
Juncker, whose institution is not itself a creditor, has been active in trying to broker a deal and has ruled out Greece stumbling from the eurozone.
Eurozone finance ministers, wary of voters at home who have contributed to bailing out Greece, are at pains to avoid Athens exploiting divisions between hawks and doves among the negotiators.
On Wednesday, Tsipras agreed in a telephone call with German Chancellor Angela Merkel and French President Francois Hollande on the need for an immediate solution involving a lower primary budget surplus target for Greece, a Greek official said.