Europe

Greek debt deal within next week, says Varoufakis

Greek Finance Minister Yanis Varoufakis Image copyright EPA
Image caption Mr Varoufakis needs a deal with the IMF and EU before Greece runs out of money

Greek Finance Minister Yanis Varoufakis has said he expects an agreement with the country's international creditors within the next week.

The government is fast running out of money and is due to make a payment of €1.5bn (£1.09bn) to the International Monetary Fund (IMF) on 5 June.

Mr Varoufakis told Star TV a deal with creditors was "very close" and denied the country might leave the eurozone.

"Another currency is not on our radar," he added.

Prime Minister Alexis Tsipras also talked up the prospect of a deal in a speech to Greek business figures earlier, saying the government was "in the final straight" before a deal.

Greece has been locked in negotiations with the EU and IMF over economic reforms they say must be implemented before the final €7.2bn tranche of the country's €240bn bailout is released.

Issues over pension reform, taxation, deregulation of the labour market, and the re-hiring of 4,000 former civil servants are yet to be resolved.

Last week, the government emptied its IMF reserves in order to pay €750m in debt interest on its existing loans.

Greece in numbers

€320bn

Greece's debt mountain

€240bn

European bailout

  • 177% country's debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Reuters

An apparent proposal from European Commission President Jean-Claude Juncker emerged in Greek newspaper To Vima on Monday before a spokeswoman quickly said she was unaware of it.

However, the plan for emergency funding and smaller primary surplus targets, in return for limited Greek fiscal reforms worth €5bn, was not completely denied.

Image copyright Reuters
Image caption A Commission spokeswoman said she was unaware of Mr Juncker's reported proposal

The status of the Juncker proposal was unclear, but European Economic Affairs Commissioner Pierre Moscovici complained in Berlin that the left-led government was "more eager to say what they don't want to keep in the programme than to propose alternatives".

Greek media reported on Tuesday that the government had sent proposals to its international creditors to revamp VAT rates in an attempt to tackle tax evasion.

Mr Tsipras is due to attend the EU Eastern Partnership Summit summit in Riga, where Greece is likely to be a key topic.

Mr Varoufakis said a payment deal was on the cards, but insisted he would reject any compromise he considered "non-viable".

"I assure you that if we face a dilemma between paying a creditor who refuses to sign an agreement with us and a pensioner, we will pay the pensioner.

"I hope we will be able to pay both," he added.

European Commission spokesman Margaritis Schinas has welcomed the commitment by the Greek government to bring the talks to a conclusion, but said more time and effort was needed "to bridge the gaps on the remaining open issues in the negotiations".

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