Greek PM forecasts 'happy end'; Eurogroup chief cites progress in talks

Fri May 8, 2015 11:54am EDT
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By Karolina Tagaris and Gavin Jones

ATHENS/ROME (Reuters) - Greek Prime Minister Alexis Tsipras forecast a happy end soon to fraught negotiations with creditors on a cash-for-reform deal, and the chairman of euro zone finance ministers said talks were making progress, though not enough for a deal next Monday.

However, with Greece's cash reserves dwindling, EU officials said there was no breakthrough in talks with the International Monetary Fund, the European Commission and the European Central Bank on sticking points such as pension and labor market reforms and budget targets.

"The organization and structure of the talks has improved, compared to what it was before, but we are still quite some way away from a situation that you could describe as a final agreement being well in sight," a senior euro zone official said.

Greece's leftist-led government, which was elected earlier this year on promises to end austerity policies, has dragged its feet on accepting unpopular reforms promised by a previous government under the country's EU/IMF bailout program.

The country faces the risk of defaulting on debt repayments and being forced out of the euro zone, but negotiations have moved so slowly that the lenders have ruled out an agreement at next Monday's meeting of euro zone finance ministers.

Tsipras, who has taken personal charge of the negotiations, told parliament in Athens: "I am confident that we will soon have a happy ending and that despite the difficulties... we will carry out the agreement which will be concluded soon in Europe."

The leftist leader said his government was "doing whatever it should in order to reach ... an honest and mutually beneficial agreement with our partners", but gave no indication of yielding on the lenders' core demands for painful reforms.

The government has said its "red lines" are that it will not make further pension cuts or legislate to ease layoffs in the private sector. It has given some ground on privatizations and value-added tax but wide gaps remain.   Continued...

Greek Prime Minister Alexis Tsipras arranges his notes after his speech during a parliamentary session in Athens May 8, 2015. REUTERS/Alkis Konstantinidis