Greek Prime Minister Alexis Tsipras has said his government will wait patiently for international creditors to become “realistic”, after talks on a debt deal in Brussels failed, BBC reports. Mr Tsipras rejected demands for pension cuts, citing his country’s dignity. Time is running out for Greece to unlock bailout funds from the EU and IMF and a European Commission spokesman said “significant gaps” remained.
One European Commissioner said it was time to plan for an emergency. Guenther Oettinger, who is also a member of German Chancellor Angela Merkel’s centre-right CDU, said if negotiations with Greece failed and its government rejected a deal on pension cuts, then on 1 July Greece would have to be considered an “emergency area”. Without a cash-for-reforms debt deal with the EU and IMF, Greece is expected to default on a €1.5bn (£1.1; $1.7bn) debt repayment to the IMF due by the end of the month.
The Athens government’s bailout deal with the EU also runs out on 30 June and Mr Tsipras has been trying to unlock the final €7.2bn instalment. Speaking to Greek newspaper Ton Syntakton, Mr Tsipras warned that “further cuts to pensions after five years of looting under the bailouts can only be viewed as serving political expediency”. “We will patiently wait until creditors turn to realism. We have no right to bury the European democracy in the land where it was born.”
Eurozone finance ministers will discuss Greece when they meet on Thursday. The gathering is regarded as Greece’s last chance to strike a deal. Europe wants Greece to make spending cuts worth €2bn (£1.44bn), to secure the final bailout funds. IMF chief economist Olivier Blanchard, in a blog post, explained that Greece needed to cut pension expenditure – which already accounted for more than 16% of GDP – by 1% of GDP. He also argued it could be done while protecting the poorest pensioners.
“Just as there is a limit to what Greece can do, there is a limit to how much financing and debt relief official creditors are willing and realistically able to provide given that they have their own taxpayers to consider,” he said.
As pressure on Greece intensified, the Athens stock market fell more than 6%. CDU figures in Germany lined up to criticise Greece’s position, with deputy party leader Volker Bouffier condemning Greek demands as unrealistic and Julia Kloeckner from the party executive accusing Mr Tsipras of overplaying his hand. Even the head of the centre-left Social Democrats (SPD) in Germany’s coalition, Sigmar Gabriel, who has been seen as more sympathetic to the Greek position, has warned the Athens government that time is running out. “Everywhere in Europe, the sentiment is growing that enough is enough,” he wrote in Bild newspaper.
In a further sign of widespread German frustration, the head of the influential IFO Institute for Economic Research, Hans-Werner Sinn, said he believed the Berlin government should refuse further funding for the Greek economy. A leading MP in Mr Tsipras’s left-wing Syriza party, deputy speaker Alexis Mitropoulos, said if talks failed, the prime minister would have to consider either a referendum or fresh elections.
Mr Tsipras’s Syriza-led coalition swept to power in late January, with an anti-austerity mandate.