Greek PM Tsipras confident of EU deal despite friction over major reforms

16 Apr10:11 PM

[ATHENS] Greek Prime Minister Alexis Tsipras told Reuters on Thursday he was "firmly optimistic" his government would reach an agreement with foreign creditors by the end of April despite friction over issues such as pension and labour reform.

In a statement, Mr Tsipras said several points of agreement had been found since talks first started, especially on areas such as tax collection, corruption and initiatives to distribute the tax burden on those who have the ability to pay.

But he acknowledged that the two sides disagreed on four issues: labour issues, pension reform, a hike in value-added taxes and privatisations, which he referred to as "development of state property" rather than asset sales.

His comments came after suggestions from European partners that a deal to unlock badly-needed aid was unlikely next week and that Greece risks running out of cash and defaulting on debt payments.

German Finance Minister Wolfgang Schaeuble, among Mr Tsipras's harshest critics, went so far as to say on Wednesday that "no one has a clue" how a deal could be reached, dampening hopes of a breakthrough at an April 24 meeting of eurozone finance ministers in Riga.

"Despite the cacophony and erratic leaks and statements in recent days from the other side, I remain firmly optimistic that there will be an agreement by the end of the month," Mr Tsipras told Reuters in a statement. "Because I know that Europe has learned to live through its disagreements, to combine its parts and move forward." He said he was confident Europe would not "choose the path of unethical and brutal financial blackmail" but instead opt for"the path of bridging differences" and "stability".

Shut out of bond markets and with financial aid frozen, Greece is perilously close to running out of cash and could be forced to choose between making debt payments in May or paying public salaries and pensions.

But talks with European and IMF lenders have been marked by misgivings and acrimony since Mr Tsipras took power pledging to end the austerity terms attached to Greece's bailout programme and have foundered lately on the extent of reforms Athens must implement.

The new prime minister is under growing pressure as he faces depleting cash coffers on one side and an austerity-weary public as well a strident far-left faction within his party on the other side demanding that Athens stand its ground.

Mr Tsipras did not say whether the government had room to offer further concessions demanded by lenders, who want Athens to reform its pension system further, raise VAT on certain items and continue with the country's privatisations programme.

Mr Tsipras blamed the deadlock on a "political disagreement"rather than issues on a technical level, in an apparent effort to hit back at accusations that Greek officials failed to provide data and details on reforms as required.

"The Greek government is working hard on every individual aspect of the negotiations, in Brussels just as much as in Athens, in order to reach a mutually beneficial solution, an honourable compromise with our partners," Mr Tsipras said.

"A compromise which will respect the recent popular mandate as well as the eurozone's operational framework."

REUTERS