Greek PM Tsipras warns EU, IMF that uncertainty 'not smart'

 

Drawing out Greece's troubled fiscal talks and creating uncertainty during tough times for Europe is not a smart choice, Greek Prime Minister Alexis Tsipras warned on Sunday.

Greece's EU and IMF creditors have been locked for months in a standoff over debt relief for Greece and budget targets demanded from Athens.

The International Monetary Fund believes demands on Greece sought by the Europeans are too ambitious.

But if the eurozone is going to stick with its plans, then the IMF wants the necessary tax hikes and pension cuts to meet them before it will lend further to Athens.

"Returning to uncertainty is not the smartest choice, especially while Europe is facing major challenges," Tsipras told the Greek weekly Documento.

With (Other OTC: WWTH - news) the European Union already reeling from Brexit, Tsipras argued that Greece's current rescue programme -- its third since 2010 -- would collapse if his government were to fall.

His leftist-led coalition has just 153 MPs (BSE: MPSLTD.BO - news) in the 300-seat parliament, and it is unlikely that even the charismatic Tsipras could push through another package of painful austerity reforms.

"A breakdown in talks in order to lead the country to elections would cause a de facto collapse in the (bailout)," Tsipras claimed.

He added that creditors had "no choice" but to trust his leftist government to take the country out of an economic crisis continuing for an eighth year.

"Either this government succeeds or the rescue programmes will fail," Tsipras said.

Following a long standoff between the EU and the IMF over debt relief and budget targets, talks between Greek officials and representatives from its creditors aimed at freeing up fresh funds resumed in Athens this week.

Also Sunday, Germany's Spiegel magazine said Greece and its eurozone partner countries were now close to a deal.

Spiegel said this would include debt relief, a lower primary surplus target, IMF support and recognition of the country's debt as sustainable -- plus immediate reforms to be adopted by Athens.

The German and Greek finance ministries declined to comment on the report.

At a Eurogroup meeting on February 20, Athens agreed to discuss additional tax and pension reforms and labour market regulation.

But Tsipras on Sunday insisted these reforms would have "zero" fiscal impact in the austerity-worn nation.

The deadlock has spooked markets with fears of a return to the crisis two years ago when Greece nearly crashed out of the euro.

Athens needs the latest tranche of bailout cash to meet seven billion euros of new debt payments in July or risk defaulting on its loans.

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