June 13, 2017 / 3:18 PM / 2 years ago

Greek PM says French proposed mechanism can end debt talks impasse

Greek Prime Minister Alexis Tsipras attends a cabinet meeting at the parliament in Athens, Greece June 13, 2017. REUTERS/Costas Baltas

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras said on Tuesday a French proposal over a mechanism linking medium-term debt relief to Greece’s growth rates could be a compromise that could end an impasse among the country’s lenders over its debt pile.

Euro zone finance ministers are to meet in Luxembourg on June 15 to discuss Greek reform progress, how to reduce debt, and possibly, bring the International Monetary Fund on board to participate financially in the country’s third bailout.

“The key is in accepting a proposal for a mechanism automatically linking medium-term debt measures with growth, bridging differences between institutions,” Tsipras told a cabinet meeting, referring to a proposal floated by France.

He said the compromise would allow positive assessments on the country’s debt sustainability, now running at around 180 percent of gross domestic product.

Tsipras suggested that he would take the issue at an EU leaders’ summit later this month, if the solution proposed on June 15 did not meet Greece’s expectations.

The scope and timing of any potential debt relief has kept the International Monetary Fund on the sidelines of the bailout program, convinced that the country’s indebtedness is unsustainable.

French Finance Minister Bruno Le Maire expressed optimism about Greece reaching a deal on new loans from its European creditors after talks with his Greek counterpart and Tsipras in Athens.

“I wanted to underline that we are doing our best with the other member states of the euro zone, with the IMF, with the Greek government, and I’m optimistic. I think we are not far from an agreement,” he told reporters.

Reporting By Michele Kambas; Editing by Jon Boyle

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