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NY Times, May 16 2015
Greek Prime Minister Rejects Further Austerity or Labor Changes
By NIKI KITSANTONIS
ATHENS — Greece’s prime minister, Alexis Tsipras, said in a speech on
Friday that his government wanted a deal with the country’s creditors
but that it would not enforce additional austerity measures, like
further pension cuts.
Mr. Tsipras said Greece wanted a “unified agreement” that would
restructure its huge debt, a thorny issue not on the agenda of the
current talks.
Weeks of difficult negotiations have yielded some common ground, Mr.
Tsipras told an audience of entrepreneurs and politicians at a
conference in Athens sponsored by The Economist. Convergence on fiscal
targets, “marginal changes” to value-added tax rates and an improvement
to the tax collection system “make us optimistic that we are very close
to an agreement,” he said.
But he said the two sides remained divided on the contentious issues of
overhauling the labor sector and the pension system.
“I want to reassure the Greek people that there is no possibility or
chance that the Greek government will back down on pension and labor
issues,” he said, adding that additional pension cuts “cannot be accepted.”
Greece and its international creditors have been locked in negotiations
aimed at releasing billions of euros of loans since February, when the
European portion of the country’s 240 billion euro bailout was extended
by four months. Greece is short of money because of the deadlock,
fueling fears that it will default on its debt, which totals around €320
billion, and possibly exit the eurozone with largely unforeseeable
repercussions.
Mr. Tsipras’s leftist-led coalition has balked at changes that it
believes will further burden ordinary Greeks. He came to power in
January on a pledge to end five years of austerity that has reduced
household incomes by a third and pushed unemployment to 25 percent.
The Greek government wants an agreement, Mr. Tsipras said in his speech
on Friday, but it must be “honorable and mutually beneficial.”
He set out four conditions for what a “single and unified agreement”
would be. Such a deal should include a budget in the black before debt
is repaid, no further cuts to salaries and pensions, a restructuring of
the debt and “strong public investments.”
“We invite the other side, after five years of nonrealistic targets and
constant failures, to give in to reality,” he said, calling for “not
just an agreement but a solution.”
Greece’s creditors appear reluctant to make concessions that could
encourage other countries to seek similar relief. European and
International Monetary Fund officials have insisted in recent days that
Greece must complete economic reforms to unlock a €7.2 billion bailout
installment.
The Greek prime minister is also under pressure at home, with
disagreements rising within the ranks of the government and Mr.
Tsipras’s party, Syriza, about the extent of concessions Greece should
make. After what was said to be a stormy meeting of Syriza officials
late Thursday, the leftist party’s political secretariat issued a
statement emphasizing the lines that the party would not cross and
calling on the Greek people to “join the battle.”
The political tensions are rising against the backdrop of dwindling
finances. Authorities met midmonth wage and pension commitments on
Friday, paying out some €500 million on schedule. But Greece has
struggled to meet its repayment schedule in recent weeks, and may not be
able make coming payments without the release of further loans.
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