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 After talks with German Chancellor Angela Merkel on Thursday in
Brussels, Greek Prime Minister Alexis Tsipras said he wanted a deal
by the end of this month. Merkel, in a comment seen as underlining
the determination of Europe's main paymaster to keep Greece in the
euro zone, said "everything must be undertaken to prevent" Athens
running out of cash.
In a blog published as euro zone finance ministers met in Riga to
assess progress on a reform-for-cash package to ward off a Greek
default, Finance Minister Yanis Varoufakis agreed to some of the
lenders' conditions, still declaring that the euro zone must drop
"an approach that has failed".
"The current disagreements with our partners are not unbridgeable,"
Varoufakis wrote in the blog, saying that he was open to some
privatizations and an independent tax commission. He rejected any
more wage or pension cuts and said he wanted leeway on the
government's primary budget surplus targets.
"Our government is eager to rationalize the pension system (for
example, by limiting early retirement), proceed with partial
privatization of public assets, ... create a fully independent tax
commission," Varoufakis said.
Those reform pledges could ease tensions following three months of
largely fruitless talks since radical leftists won power in Athens
on a promise to reverse austerity and renegotiate Greece's
240-billion euro bailout package.
European Commission Vice President Valdis Dombrovskis said there
would not be a deal in the Latvian capital and told Greece to
accelerate its work on a reform list.
Slovak Finance Minister Peter Kazimir, who confessed to being "just
a bit tired" of the Greek saga, said the end of June was now the
final date for a deal because Greece's bailout expires then.
Already investors are looking to the next finance ministers' meeting
in Brussels on May 11, but several euro zone officials told Reuters
they do not expect a deal then either. Greece is due to pay 750
million euros back to the International Monetary Fund the following
day.
"There is a great sense of urgency for all of us. I have spoken to
my colleagues in Athens and they're very determined to get the deal.
They know that the time is running out," said Jeroen Dijsselbloem,
chairman of the Eurogroup of ministers.
'NO GREXIT'
The impact of a potential Greek default is the biggest risk to the
euro zone's economic recovery after a long crisis from which the
19-nation currency area is finally emerging.
Austrian Finance Minister Hans Joerg Schelling insisted Greece would
stay in the euro zone and EU officials believe Athens can scrape
together enough cash to meet its payment obligations into June.
Asked about the danger of a "Grexit", Schelling told reporters:
"There is no exit from the euro, only from the European Union."
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However, unlike at the height of the euro zone crisis in 2011-12,
economists believe the euro zone is far better placed to withstand
any Greek default because the currency bloc has its own bailout
fund, support from the European Central Bank and a banking union
that can protect banks from crisis fallout.
"The risk of contagion exists, but it is much lower than it was
before," Standard & Poor's Chief Economist Jean-Michel Six told
Italian financial daily Il Sole 24 Ore.
The Greek government wants a broad political deal with other euro
zone leaders, leaving officials to fill in the details. But partly
due to a lack of trust, the euro zone, led by Germany, insists
technicians must draft a detailed, comprehensive agreement and only
then will governments sign off on it.
ROOM FOR MANEUVER
The lack of progress is starting to hurt Tsipras' popularity and
that of his government. Varoufakis warned in his blog against
pushing Greece too hard, saying the Greek people would not support
more spending cuts after one of the deepest recessions in Europe
since the 1950s.
In Riga, French Finance Minister Michel Sapin told Reuters there was
room for maneuver on Greece's primary surplus, the budget balance
before debt servicing costs, "as long as it remains positive."
Greece officials say they are aiming for a primary budget surplus of
1.2 to 1.5 percent of gross domestic product this year, below the
goals of 3 percent in 2015 and 4.5 percent in 2016 set in Greece's
2012 EU/IMF bailout program.
Still, Greece is not mulling calling a referendum or a snap election
because the government already has a recent popular mandate, its
government spokesman said on Friday.
"We have no reason to bring these issues on the table because we
have and we are implementing the popular mandate we received on
January 25," government spokesman Gabriel Sakellaridis told Greece's
Mega TV.
(Reporting by Jan Strupczewski, Robin Emmott, Ingrid Melander,
Lefteris Papadimas,Tom Korkemeier, Gederts Gelzis, Francesca Landini;
Editing by Paul Taylor)
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