Athens.- Greece’s government is confident of reaching a deal with its creditors this week and is open to pushing back parts of its anti-austerity programme to make that happen, the country’s interior minister said Saturday.
Greece and its EU/IMF creditors have been locked in talks for months on a cash-for-reforms deal and pressure is growing for a deal, since Athens risks default without aid from a bailout programme that expires on June 30.
“We believe that we can and we must have a solution and a deal within the week,” Interior Minister Nikos Voutsis, who is not involved in Greece’s talks with the lenders, told Skai television.
“Some parts of our programme could be pushed back by six months or maybe by a year, so that there is some balance,” he said.
He did not elaborate on what parts of the ruling Syriza party’s anti-austerity programme could be pushed back, but the comments suggested a greater willingness to compromise on pre-election pledges.
Prime Minister Alexis Tsipras stormed to power in January on promises to cancel austerity, including restoring the minimum wage level and collective bargaining rights.
The government earlier this week said it hoped for a deal by Sunday, though international lenders have been less optimistic, citing Greece’s resistance to labour and pension reforms that are conditions for more aid.
Voutsis said Athens and its partners agreed on some issues, such as achieving low primary budget surpluses in the first two years. But they still disagreed on a sales tax, with Greece pushing so any VAT hikes will not burden lower incomes.
“A powerful majority in the political negotiations has showed respect for the fact that there can’t be further austerity strategies for the Greek issue, the Greek problem and the Greek people,” he said.
The debt stand-off between Greece and its European Union partners overshadowed a meeting of policymakers from the Group of Seven rich nations in Dresden, Germany, on Friday.
The United States warned of a possible accident for the world economy if Greece and its creditors miss their June deadlines to avert a debt default.
Negotiations between Greek authorities and representatives of the institutions in the Brussels Group are continuing at an intense pace. There was a meeting between technical teams on a wide range of issues on Saturday morning, including the operation of Greece’s justice system, markets and others, while Brussels Group officials will meet in the afternoon.
Greek diplomatic sources said they are satisfied with the progress in the talks, noting that they are tending toward achieving agreement in areas of key importance, such as VAT, a drastic restriction of early pensions, gradual merger of social insurance funds and others.
The talks will continue on Sunday, while EU sources said that they will likely continue into next week as well.
There has been real progress in the talks on an agreement for Greece, French Prime Minister Manuel Valls said in an interview with the Italian newspaper “La Repubblica” published on Saturday.
Asked about the possible repercussions of a Greek exit from the Euro, Valls expressed conviction that a deal can be reached.
“From the start of the crisis, France has sought a solution acceptable to everyone. There has been real progress and we remained convinced that it is possible to arrive at an agreement soon. We are absolutely not working on a possible Greek exit from the euro,” he said.
Valls was also asked whether parties like SYRIZA and Spain’s Podemos belong to ‘a Left of the past’ and noted that care must be taken not to make pre-election promises that cannot then be kept in government, adding that this increased a “trust deficit” in politics and people’s desperation.
In an interview with Realnews newspaper published on Saturday, Economy Minister George Stathakis said Athens had no alternative plan.
“The idea of a Plan B doesn’t exist. Our country needs to stay in the eurozone but on a better organised aid programme,” he said.
Stathakis was confident a deal will be reached. “Otherwise, mainly Greece but the European Union as well will step into unchartered waters and no-one wants that.” (Reporting by Angeliki Koutantou; Editing by Deepa Babington and David Holmes)
Greece’s Finance Minister Yanis Varoufakis outlined a plan that he said will allow Greece to return to borrowing from the markets, in an interview with the Greek newspaper “Avghi” published on Saturday.
Among others, the plan called for the issue of a low-interest, 30-year loan from the European Stability Mechanism (ESM) to replace the debt currently held by the European Central Bank (ECB), while simultaneously restructuring the rest of Greece’s debt.
According to Varoufakis, the government’s priority is a “combination of debt restructuring, investment injections and reforms that go beyond the inhumane practice of cutting pensions, benefits and wages.” Such a combination, he added, will help Greek society escape the ‘vortex’ of a self-reinforcing crisis of debt and recession.
Varoufakis slammed the ENFIA property tax introduced by the previous government, saying it was a “hideous” tax that needed to be abolished. “As long as it is not abolished we all feel accountable to the Greek people. But its abolition, even if gradual, will take place when the negotiation has ended and we can find equivalent taxes from large property taxation and from gradated taxation of incomes that are now evading,” he said.
The finance minister was also critical of a position expressed by European Commission President Jean-Claude Juncker, who called for an additional 1.8 billion euros to be raised by increasing VAT.
“In an economy in the throes of deflation and debt, with a tax system that burdens the have-nots, how can we increase public revenues by 1 pct of GDP via indirect taxation without causing even greater damage to the economy’s engine, to production and the markets,” Varoufakis said.
Replying to those speculating about his possible resignation, meanwhile, Varoufakis stressed that “none of us are going to throw down our shield”.
May 29 The United States warned on Friday of a possible accident for the world economy if Greece and its creditors miss their June deadlines to avert a debt default. Germany said there was no sign of a breakthrough.
U.S. Treasury Secretary Jack Lew repeated warnings not to minimise the global stability risk of Greece sliding out of the euro zone, even if most of its debt is no longer held by commercial banks.
“There is great uncertainty in there at a time when the world needs greater stability and certainty,” Lew told reporters after the G7 meetings.
Greece, which has been stuck in a deep debt crisis for the past five years, is due to pay back 300 million euros ($329.61 million) to the International Monetary Fund next Friday, although the IMF has said that deadline could be pushed back until later in June.
On June 30, Greece’s bailout expires, meaning it would be unable to call on cash currently available to it.
Lew said time was precious. “If you look from January until now, too much time has been spent unproductively,” he said.
He called for agreement quickly on the broad terms of a deal to avoid the risk of stumbling on difficult details at the last moment: “I think waiting until the day or two before whatever the deadline is, is just a way of courting an accident.”