NEWS

Debt talks resume amid concerns over differences, looming repayment, political upheaval

Government officials on Monday expressed confidence that Greece was close to a deal with creditors that would allow loans to be unlocked but pressure is growing on Prime Minister Alexis Tsipras from abroad and on the domestic front.

The cautious optimism in Athens does not appear to be shared by creditors. A European official with knowledge of the negotiations, which resume Tuesday, told Kathimerini that momentum is lacking. “For us to move forward there has to be a political decision,” he said.

There are four sticking points – fiscal issues, pension and labor reforms and changes to value added tax rates. The two sides have made few concessions and continue to differ on forecasts.

According to Olivier Blanchard, the International Monetary Fund’s chief economist, Greece’s budget proposals are not adequate to ensure a surplus this year, which had been forecast at 3 percent of gross domestic product. In an interview with French newspaper Les Echos, Blanchard stressed the need for “credible measures” if Greece is to regain a surplus, saying however, that “this is far from being the case at the moment.”

Briefing reporters in Athens, government spokesman Gavriil Sakellaridis was upbeat, saying he believed a deal could be reached “soon.” The deal would have to be sealed in the coming days for it to go through Parliament and gain approval for the release of loans. A 300-million-euro IMF repayment looms on June 5.

Sakellaridis said that Greece intends to make the payment. “We want to be consistent with our obligations and so we are striving for a deal so the economy can get some relief,” he said. His reassurances came after Interior Minister Nikos Voutsis said Greece “can’t and won’t” pay the IMF on June 5, the first such explicit statement by a minister. Voutsis made his comments on Sunday, a few hours before SYRIZA’s central committee voted down a proposal by the party’s radical Left Platform to halt payments to creditors.

Sakellaridis did not confirm reports that Greece is considering asking the IMF to allow it to settle repayments worth a total of 1.6 billion euros next month in one sum at the end of June.

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