June 18, 2015 / 6:39 AM / 2 years ago

Tsipras says 'blind insistence' on pension cuts would worsen crisis

Greek Prime Minister Alexis Tsipras gestures during a news conference with Austrian Chancellor Werner Faymann at Maximos Mansion in Athens June 17, 2015. REUTERS/Paul Hanna

BERLIN (Reuters) - The “blind insistence” on cutting Greek pensions will only worsen the country’s already dire financial crisis, Greek Prime Minister Alexis Tsipras wrote in a German newspaper commentary on Thursday.

In a guest column for Der Tagesspiegel newspaper in Berlin, Tsipras also rejected the “myth” that German taxpayers are paying Greek pensions and wages. He said Greeks, contrary to the widespread belief in Germany, work longer than Germans.

“The blind insistence of cuts (in pensions) in a country with a 25 percent unemployment rate and where half of all the young people are unemployed will only cause a further worsening of the already dramatic social situation,” Tsipras wrote.

He said that pensions are the only source of income for countless families in Greece. In Athens on Wednesday he also rejected pension cuts that creditors are seeking to unlock aid.

Tsipras also wrote that the state’s expenditures for pensions and social spending were cut by 50 percent between 2010 and 2014. “That makes further cutbacks in this sensitive area impossible.”

Tsipras also challenged perceptions among Germans, a majority of whom now want Greece to leave the euro zone, about who is paying for Greek wages and pensions:

“Anyone who claims that German taxpayers are coming up for the wages and pensions for Greeks is lying,” he wrote. “I‘m not denying there are problems...But I‘m speaking out here to show why the ‘cuts offensive’ of the past years has led nowhere.”

Tsipras’s leftist government has faced dire warnings that it risks being forced out of the euro zone and left without support if it fails to strike a aid-for-reforms deal with creditors.

Hopes of a breakthrough on Thursday at a meeting of European finance ministers, once seen as a final chance for an agreement, are looking increasingly dim.Athens must find a way out of the impasse by the end of June, when it faces a 1.6 billion euro ($1.8 billion) repayment due to the International Monetary Fund, potentially leaving it bankrupt and on the verge of exiting the euro zone.

Finance Minister Wolfgang Schaeuble maintained his hard line against Greece, telling Bild newspaper the question was whether “Greece fulfils its commitments from the existing program.”

Schaeuble stressed the IMF must continue to take part in the rescue program: “Without its important contribution, it (the program) doesn’t work.”

Reporting by Erik Kirschbaum; editing by Michael Nienaber and Dominic Evans

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