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Greek PM Tsipras confident of EU deal despite friction over reforms

Greek Prime Minister Alexis Tsipras gestures during a cabinet meeting at the parliament building in Athens March 29, 2015.
Kostas Tsironis | Reuters

Greek Prime Minister Alexis Tsipras told Reuters on Thursday he was "firmly optimistic" his government would reach an agreement with its creditors by the end of April despite friction over issues such as pension and labor reform.

In a statement, Tsipras said several points of agreement had been found since talks first started, especially on areas such as tax collection, corruption and distributing the tax burden towards those who most able to pay.

But he acknowledged that the two sides disagreed on four major issues: labor rules, pension reform, a hike in value-added taxes and privatizations, which he referred to as "development of state property" rather than asset sales.

His comments follow suggestions from European partners that a deal to unlock badly needed aid was unlikely next week and that Greece risks running out of cash and defaulting on debt payments.

IMF: Greece has bigger problems than debts
IMF: Greece has bigger problems than debts

German Finance Minister Wolfgang Schaeuble, among Tsipras's harshest critics, went so far as to say on Wednesday that "no one has a clue" how a deal could be reached, curbing hopes of a breakthrough at an April 24 meeting of euro zone finance ministers in Riga.

"Despite the cacophony and erratic leaks and statements in recent days from the other side, I remain firmly optimistic that there will be an agreement by the end of the month," Tsipras told Reuters.

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"Because I know that Europe has learned to live through its disagreements, to combine its parts and move forward."

He said he was confident Europe would not "choose the path of unethical and brutal financial blackmail" but instead opt for "the path of bridging differences" and "stability".

No leeway from IMF

Greece's Finance Ministry denied a report by the Financial Times that Athens had approached the International Monetary Fund to request that a delay in loan repayments.

Whether it did or not, IMF chief Christine Lagarde said there was no question of any such leeway.

"It is clearly not a course of action that would actually fit or be recommendable in the current situation. We have never had an advanced economy asking for payment delays," she told reporters in Washington, where many of the protagonists in the Greek negotiations are gathered for the IMF's Spring meeting.

Shut out of bond markets and with financial aid frozen, Greece is perilously close to running out of cash and could be forced to choose between making debt payments, including to the IMF, in May or paying public salaries and pensions.

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But talks with its lenders have been marked by misgivings and acrimony since Tsipras took power pledging to end the austerity terms attached to Greece's bailout program and have foundered lately on the extent of reforms Athens must implement.

The new prime minister is under growing pressure as he faces dwindling cash on one side and on the other an austerity-weary public, as well as a strident far-left faction within his party demanding that Athens stand its ground.

Tsipras did not say whether the government had room to offer further concessions demanded by lenders, who want Athens to reform its pension system further, raise VAT on certain items and continue with the privatization program.

Tsipras blamed the deadlock on a "political disagreement" rather than technical issues, in an apparent effort to hit back at accusations that Greek officials failed to provide data and details on reforms as required.

"The Greek government is working hard on every individual aspect of the negotiations, in Brussels just as much as in Athens, in order to reach a mutually beneficial solution, an honorable compromise with our partners," Tsipras said. "A compromise which will respect the recent popular mandate as well as the euro zone's operational framework."