Tags: greece | euro | debt deal | creditors

Tsipras Urges Euro-Area Creditors to Compromise for Greek Deal

Saturday, 23 May 2015 10:17 AM

Greek society can’t absorb more austerity, and the country’s creditors must compromise to break the impasse over the release of funds for its cash-strapped economy, Prime Minister Alexis Tsipras said.

Tsipras sought to placate critics within his Syriza party after returning from an EU Summit in Riga, Latvia, where talks with German Chancellor Angela Merkel and French President Francois Hollande failed to yield a breakthrough on measures to unlock bailout funding. Some members of his party advocate defaulting on loans rather than backing down from the anti- austerity policies that swept it to power in January, even if that leads the country out of the euro.

“We’ve shown willingness to compromise to get to a mutually beneficial solution,” Tsipras said in a speech at the start of a two-day meeting of Syriza’s central committee on Saturday. “But we ask from our partners the same respect and to also make concessions.”

Merkel and Hollande last week gave Tsipras until the end of May to reach a deal on its aid program, including economic policy changes demanded by Greece’s creditors. As time runs short, his government has to pay monthly salaries and pensions by next Friday and repay about 300 million euros to the IMF a week later.

No Break-Up

A Greek exit from the euro is just a matter of time and wouldn’t lead to the breakup of monetary union, former Federal Reserve Chairman Alan Greenspan told Het Financieele Dagblad in interview published Saturday. An exit could make the euro stronger, billionaire investor Warren Buffett said in an interview in the Euro-am-Sonntag newspaper.

German Finance Minister Wolfgang Schaeuble mentioned the possibility that Greece may need a parallel currency alongside the euro if the country’s talks with creditors fail, according to two people who attended a recent meeting, noting he didn’t endorse the idea. The German Finance Ministry on Friday called the account of Schaeuble’s remarks “inaccurate.”

Negotiators from Greece and its creditors are continuing technical talks in the so-called Brussels Group “over the coming days in order to accelerate progress,” European Commission spokeswoman Mina Andreeva said in Brussels on Friday.

Pensions, sales-tax rates and targets for a primary budget surplus are among the open issues remaining between Greece and its creditors, a Greek government official told reporters after the meeting between Tsipras, Merkel and Hollande. A main obstacle is that the IMF needs to be on board, he said.

Immediate Hardship

“I know that there is a lot of work to be done, that the parties are now working,” IMF Managing Director Christine Lagarde told reporters in Brazil on Friday. “It has to be a comprehensive approach and, as I said in other places, it cannot be a quick and dirty job. The IMF is not known for doing that, nor are the other partners in the negotiations.”

Failure to reach a deal quickly would create immediate hardship for Greece, U.S. Treasury Secretary Jacob J. Lew told Tsipras in a phone call on Friday, according to an e-mailed statement from the Treasury.

“We’ve already seen the factions within Syriza beginning to rumble around this situation,” Michala Marcussen, global head of economics at Societe Generale SA, said in a Bloomberg TV interview on Friday. “We find it very difficult to see a situation where we can come up with a solution and we can say ‘that’s it, Greece is solved, we can now move on.’ This will be an ongoing issue.”

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Greek society can't absorb more austerity, and the country's creditors must compromise to break the impasse over the release of funds for its cash-strapped economy, Prime Minister Alexis Tsipras said.
greece, euro, debt deal, creditors
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2015-17-23
Saturday, 23 May 2015 10:17 AM
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