Brussels, 18/05/2015 (Agence Europe) - The Greek government believes that an agreement with its institutional creditors must be reached by the end of May in order to avoid default.
“There should be a solution in May so we can resolve our liquidity issues”, Gabriel Sakellaridis, a spokesperson to the Greek government, announced on Monday 18 May at a press conference in Athens, according to reports in the Greek media. The spokesperson went on to state that the Greek authorities will be able to pay salaries and pensions in May, whatever happens. Ruling out a new tax on bank deposits in order to raise funds, he added that the Greek government would not sign off a third bailout plan.
Greece and its institutional creditors have spent the last four months in negotiations on reforms to be carried out by the coalition government, led by the radical left-wing party Syriza, to boost the economy. Stressing that economic austerity has led to a humanitarian crisis in the country, Athens hopes to apply reforms in line with the social promises it made during the election campaign. The country's creditors are not completely opposed to this, but wish to make sure that these reforms do not lead to problems for the stability of the public finances of the country. An agreement would pave the way for the disbursement of total aid of €7.2 billion, including €3.6 billion from the IMF.
Sakellaridis also made it clear that Athens was sticking to its “red lines” in the negotiations with its partners: rejecting any pension cuts, an economic growth plan, a viable primary surplus target (not including debt servicing) and debt restructuring.
According to the Financial Times, the idea of putting a 'take-it-or-leave-it' draft agreement to Greece - as was the case in the negotiations with the Cypriot bailout plan - has been discussed.
European Commission positive
When asked about the progress in the talks, the European Commission referred to “constructive talks ongoing”. “Progress is being made, even if at a slow pace”, said the European institution's spokesperson, Margaritis Schinas. He did not rule out the possibility that the Eastern Partnership Summit, to be held in Riga later this week, could provide the European leaders with the opportunity to discuss the Greek dossier, although with no particular hopes in mind. He added: “What matters is that Greece paid the IMF. It is important that it honours its commitments under the existing programme”. In June, as well as its operating expenditure, Athens will have to pay €1.5 billion back to the IMF, with an instalment of €300 million due on 5 June. (Mathieu Bion)