Business

Greece sticking to 'red-line' electoral promises

Greek Prime Minister Alexis Tsipras Image copyright Getty Images
Image caption Greek PM Alexis Tsipras' government is adamant it will not cut pensions

The Greek government will stick to the "red line" promises it made to its electorate and not make concessions in negotiations with creditors, it said.

Spokesman Gabriel Sakellaridis told the press in Athens that labour and pension issues are non negotiable.

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

Talks with the International Monetary Fund (IMF) and the European Union (EU) will continue over the weekend.

Creditors have demanded cuts in spending, including plans to trim the civil service and privatisation of state assets, in order for Greece to continue receiving loans.

But Greece's ruling left wing Syriza party, led by Alexis Tsipras, was voted in earlier this year on promises to ease up on the highly unpopular austerity measures with increases in the minimum monthly wage and a job creation programme.

Mr Sakellaridis said: "There should not be an expectation on the part of institutions... that the government will back down on everything.

"When you negotiate, there should be mutual concessions."

Some creditors, notably Germany, are losing patience with what they see as Greece's profligacy.

Risk

The prospect of a deep schism between Greece and the financial community, particularly the eurozone area, has haunted financial markets for years.

The president of the European Commission, Jean-Claude Juncker, said it would not be wise to openly discuss a Greek exit from the euro: "If I were to say that "Grexit" [Greek exit from the EU] was an option, what do you think would happen then on the financial markets?"

But in France, Finance Minister Michael Sapin was more reassuring, saying Greece's talks with its international creditors were heading in the right direction: "The risk of things running off the rails for Greece also entails that risk for Europe," he said, calling for a "push towards a compromise" at Monday's gathering of eurozone finance ministers.

Greece is due to make its next repayment - of €763m (£566m), one of its biggest - to the IMF on Tuesday.

The Greek finance minister, Yanis Varoufakis, insisted that the country will meet Tuesday's deadline, amid concerns that it may not have enough money to so do.

Image copyright Reuters
Image caption Greek finance minister Yanis Varoufakis says he is still "key negotiator" for bailout talks

'Glacial' Europe

Speaking to the BBC, Mr Varoufakis said: "The Greek government used to pretend it could meet certain targets that it knew it could not keep.

"This cycle of debt deflation and insincerity has to end. We are prepared to go all the way down to the wire.

"Europe works in glacial ways, and eventually does the right thing after it has tried all alternatives."

He ruled out a bailout agreement being reached at the eurozone finance ministers meeting on Monday, but insisted they "will certainly have an agreement within the next couple of weeks or so."

He also said he is "the chief negotiator of the Greek government", countering claims that he had been sidelined after a reshuffle in the bailout negotiations team in late April.

Greece met the deadline on Wednesday to pay the IMF €200m (£148m) in interest payments.

More on this story