Greece wants new deal with EU creditors to begin Sept 1: ministry

PUBLISHED ON FEB 10, 2015 1:20 AM

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Greek Prime Minister Alexis Tsipras at a press conference in Vienna on Monday. -- PHOTO: AFP 

ATHENS (AFP/BLOOMBERG) - Greece wants a new economic deal with its EU creditors to enter into force from Sept 1, and says it must include social support measures and less harsh budget goals, a finance ministry source said Monday.

"It is in our interest to have the deal running from September 1," the source said, ahead of crucial talks with eurozone finance ministers on Wednesday.

The official added: "Our red line is the humanitarian crisis and a major reduction in the primary surplus targets."

Under the previous conservative government, Greece was to record a primary surplus - the budget balance before interest payments on debt - of around 4.0 per cent of output in 2016.

The new leftist government is only prepared to deliver a surplus of 1.5 per cent of output, the source said.

Athens is under pressure to woo its international creditors as quickly as possible because the European portion of Greece's EU-IMF bailout is due to expire at the end of the month.

Greece's Finance Minister Yanis Varoufakis will present a proposal at a Wednesday meeting of euro area finance ministers in Brussels that will ask for an 8 billion-euro (S$12.25 billion) increase in the stock of Treasury Bills the country is allowed, said a government official who asked not to be named as the negotiations are confidential. It will also seek the disbursement of 1.9 billion euros of profits that euro area central banks made on their Greek bonds holdings.

The standoff between Greece and its creditors over the conditions attached to its 240 billion-euro lifeline risks leaving Europe's most-indebted state without any funding as of the end of this month, when its current bailout expires. European leaders pushed back on Prime Minister Alexis Tsipras's efforts to get out of austerity imposed by the previous government as a condition for Greece's bailout, setting the stage for a clash