Greece sticks to electoral promises

As talks between Greece and its creditors continue, eurozone’s troubled economy says it will stick to its ‘red lines’ on pension and labour market reforms

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Greece defied its international creditors on Thursday by sticking to "red lines" on pension and labour market reforms. It also urged lenders to give ground, dimming prospects of progress next week towards securing desperately needed financial aid.

Despite efforts by European Commission President Jean-Claude Juncker to convince leftist Prime Minister Alexis Tsipras into moving on two key conditions for releasing EU/IMF bailout funds, the Greek government spokesman said lenders could not expect Athens to make all the concessions for a deal.

"There should not be an expectation on the part of institutions ... that the government will back down on everything," Gabriel Sakellaridis told a news conference. "When you negotiate, there should be mutual concessions” he said.

Sakellaridis added, "We won't go beyond the limits of our red lines," he said. "It's clear that we cannot cut pensions."

Athens is quickly running out of cash and hopes to reach a deal on reforms with its lenders, who have ruled out an agreement by next Monday’s eurozone meeting.

Sakellaridis said Greeks are hoping that the Eurogroup finance ministers will recognise progress towards an agreement in a joint statement, giving the European Central Bank leeway to let Athens sell more short-term debt to Greek banks.

That would ease the immediate funding crunch, helping the government make a €750 million payment to the IMF on May 12, pay wages and pensions later.

However, sources familiar with the deliberations said the ECB was highly unlikely to make such a move unless the eurozone ministers set out a very strong prospect of releasing the frozen bailout funds.