Greek debt ‘agreement in sight’

Alexis Tsipras and European Commission chief Jean-Claude Juncker

Alexis Tsipras, left, held four hours of talks with Jean-Claude Juncker

Greek Prime Minister Alexis Tsipras says talks in Brussels on Greece’s debt crisis were “constructive” and he believes “an agreement is in sight”.

But he said Greece still rejected some proposals put forward by creditors.

Eurogroup chief Jeroen Dijsselbloem said the talks between Mr Tsipras and European Commission chief Jean-Claude Juncker were “very good” and would resume in a few days.

Greece has a €300m (£216m) IMF repayment due on Friday.

Mr Tsipras said that Greece and its creditors were now “very close to an agreement over primary surpluses” which he said would mean going forward “without the tough austerity measures of the past”.

But he said there were “points that no-one would consider as a base for discussion”, citing cuts to pensions and a raise in sales tax for electricity.

International creditors have put forward proposals for a deal to unlock funds for Greece while Mr Tsipras has presented a new plan of his own.

French President Francois Hollande had earlier suggested Greece and its lenders were on the brink of an agreement.

However, Greece’s Deputy Shipping Minister, Thodoris Dritsas, said on Thursday that what had been proposed by Mr Juncker during the meeting had been “beneath [Greece’s] expectations in every way”, Reuters reported.

Grey line

Greece debt talks – main sticking points

Grey line

The primary budget surplus target – the amount by which tax revenues exceed public spending – has for weeks been a major sticking point.

According to Reuters news agency, Greece will be asked to post a budget surplus of 1% of GDP this year and 2% next.

Greece has proposed 0.8% for 2015 and 1.5% for 2016, according to reports from Athens.

Greece in numbers


Greece’s debt mountain


European bailout

  • €56bn Greece owes Germany

  • 177% country’s debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Greece’s current bailout arrangement with the IMF, European Central Bank (ECB) and European Commission runs out at the end of June.

The cash-strapped government has been haggling since February over the release of the last €7.2bn in funds.

Asked if Greece would make its next repayments to the IMF, Mr Tsipras said, “don’t worry, we will continue”.

Friday’s payment is the first of four due to the IMF in June.

IMF sources say Greece could repay all the instalments in a single transaction at the end of the month, although the Athens government has not yet asked to do so.

In June Greece owes 6.74 billion euros
In July Greece owes 5.95 billion euros
In August Greece owes 4.38 billion euros

Full details of the creditors’ proposals remain under wraps, but the five-page document is believed to call for pensions changes and an overhaul of labour laws. It is not believed to include a plan for debt relief.

Mr Tsipras’s own proposals, which he described as “a realistic plan for Greece to exit the crisis”, were earlier dismissed by Mr Dijsselbloem as going “nowhere near far enough”.

Mr Tsipras’s far-left Syriza party won elections in January on a pledge to oppose deeply unpopular austerity measures imposed by Greece’s creditors.

However, failure to reach a deal could trigger a Greek default and a potential exit from the eurozone.

Mario Draghi, president of the ECB, said on Wednesday the bank wanted Greece to stay in the single currency, but that a “strong agreement” was needed between Athens and its creditors.

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